UPDATE 1-KBC sells treasury shares, raising 350 mln euros

Tue Oct 16, 2012 5:19am EDT

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BRUSSELS Oct 16 (Reuters) - Belgian financial group KBC said on Tuesday it had sold 18.2 million of its treasury shares through a placement with institutional investors, meeting a pledge to EU regulators and generating gross proceeds of 350 million euros ($453 million).

KBC said the sale was part of an agreement with the European Commission in exchange for approval of a 7 billion euro bailout it took from Belgium and the region of Flanders during the 2008-2009 financial crisis.

The group said the sale of the shares, which represented 5.1 percent of its share capital, added 0.3 percent to its solvency levels and would have no impact on its profit and loss account.

It now expects its common equity ratio under Basel III to be 9.5 percent on a fully loaded basis at the end of 2013.

KBC said it sold the shares at 19.25 euros a piece, 4.7 percent below Monday's closing level of 20.20 euros.

The Belgian regulator had suspended the group's shares on Tuesday morning, pending the outcome of the placement.

KBC still needs to repay 4.17 billion euros of principal, plus penalties, by the end of 2013, having already paid 500 million euros of principal in December. KBC said earlier this month it aimed to pay a significant part of this by the end of 2012. ($1 = 0.7730 euros) (Reporting By Robert-Jan Bartunek and Philip Blenkinsop; editing by Rex Merrifield)

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