Melexis says to sue KBC over CDO sale -paper

BRUSSELS Jan 14 (Reuters) - Belgian semiconductor specialist Melexis (MLXS.BR) will take KBC (KBC.BR) to court to seek compensation for debt products sold to it by the Belgian bank and insurance group, its chairman told De Tijd newspaper.

Melexis bought 15 million euros ($19.7 million) of CDOs (collateralised debt obligations) in 2006, but had fully written off that amount by the end of 2009.

"I am certain that we will get back in full the money that we have invested," Melexis Chairman Roland Duchatelet was quoted as saying in Belgian business daily De Tijd on Friday.

"We first talked with KBC, but all chances of a settlement are gone. A legal case has become unavoidable," he added.

Melexis is not the only purchaser of CDOs seeking compensation from KBC. Belgian lingerie group Van de Velde last year took legal action against KBC over a 3.45 million euro CDO investment it made. A ruling has not yet been made.

In general holders of CDOs, seen by many as solid investments before the credit crunch, have suffered heavy losses after the financial crisis wiped out much of their value.

KBC reached a settlement in September 2009 with investor activist group Deminor on behalf of 40 private banking clients related to CDOs it had sold.

A KBC spokeswoman said the company did not envisage paying compensation to corporate customers as they typically had experienced treasury managers who would have fully understood complex investments.

KBC, which received 7 billion euros in state aid to help it through the global financial crisis, itself recorded losses on CDOs in 2009 of 1.85 billion euros and of 4.00 billion in 2008.

By the end of September 2010, it had reduced the value of its CDOs by 6.5 billion euros, although state guarantees cover some of its exposure. ($1=.7610 Euros) (Reporting by Philip Blenkinsop; Editing by Jon Loades-Carter)