Announcement no. 61-2010
3 December 2010
Company announcement
Amagerbanken's terms agreement with the Financial Stability Company
On 28 June 2010 Amagerbanken and the Financial Stability Company entered into an
agreement of terms of granting of state guarantee, whereby the Financial
Stability Company committed itself to guarantee the Bank's issue of bond loan of
totally DKK 13.5 billion.
The basis of the agreement was the standard agreement, which the Financial
Stability Company applies in connection with entering agreements of terms of
granting of state guarantee. This agreement includes a number of standard terms,
e.g. terms regarding the guarantee commission, recourse, interest and costs.
The Financial Stability Company, however, placed specific terms when entering
the agreement.
Some of these terms have already been published by the Bank, e.g. the demand for
capital increase of min. DKK 750 million, while others are not widely known. The
Bank's Board of Directors considers it most correct to inform shareholders and
other stakeholders of the contents of these specific terms to create
transparency of the Bank's conditions in this matter.
The Bank committed itself to ensure that the Financial Stability Company had two
members elected to the Bank's Board of Directors nominated by the Financial
Stability Company (see announcement no. 57-2010 dated 15 November 2010). These
two members must approve all essential decisions in the Bank.
The agreement does not include a complete list of what is an essential decision,
but below-mentioned may be mentioned as examples;
* Funding of the Bank's business, including raising of loans
* Amendment of accounting principles and election of auditors
* Budgets, including larger investments and change of branch structure and
staff
composition
* Recommendation of dividend at the general meeting
* Merger or other reorganisation
* Allocation of new commitments above DKK 50 million and
* Increase of commitments above DKK 25 million with impairments or increased
solvency requirement.
In addition to this the two board members have the possibility to postpone the
determination of the importance of a decision to the Financial Stability
Company, if both members consider a decision essential and the majority of other
board members do not agree.
Furthermore, the Bank committed itself to make the changes in the Executive
Board structure and composition which the Financial Stability Company requires,
just as the Bank has committed itself to transfer the business to a buyer as
directed by the Financial Stability Company, if the Bank does not meet the
capital requirements of the Danish Financial Business Act.
In this connection the Bank may inform that the Financial Stability Company
already in September instructed the Bank to strengthen the Executive Board and
replace the managing director.
The consequence, if the Bank does not comply with the terms, is that the
Financial Stability Company can sustain the default rights, which may cause the
Bank to repay an amount equal to DKK 13.5 billion. The terms are valid for the 3
year period during which the agreement is effective.
Enclosed please find agreement of terms for granting of state guarantee “Aftale
om vilkår for ydelse af statsgaranti”) - only available in Danish language.
Yours faithfully,
A M A G E R B A N K E N
Niels Heering Steen Hove
Chairman Managing Director and
Chief Executive
For further information please contact Mr. Niels Heering, Chairman at phone no.
+45 4017 7531 or Mr. Steen Hove, Managing Director and Chief Executive at phone
no. +45 2630 6995.
www.amagerbanken.com
Amagerbanken`s terms agreement with the Financiel Stability Company
| Source: Amagerbanken A/S
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