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Fortis gets $630 mln capital from Russia

Belgian-Dutch financial services group Fortis received $630 million in capital from Russian billionaire Suleiman Kerimov as part of its recent share issue.

Fortis, which last week raised €1.5 billion ($2.4 billion) from the heavily discounted share issue, secured the money from Kerimov's Swiss-based investment vehicle, Millennium Group, as part of the share issue, the Wall Street Journal said, citing people familiar with the matter.

Millennium Group already owns about 2% of Fortis along with stakes in US investment bank Morgan Stanley, Swiss bank Credit Suisse Group and Germany's Deutsche Bank AG, according to a person close to Millennium, the paper said.

On Thursday, shares of Fortis, which has been hit by the fallout from the US subprime crisis and credit crunch, plunged to their lowest point in more than five years after the company announced a package of measures, including the share issue, to shore up its finances.

Fortis said it was forced to take what it called “exceptional measures” by tough market conditions as well as its purchase of parts of its former Dutch rival ABN AMRO, sealed just as the credit crisis hit last year.

In addition to the share issue, it said it would skip this year's interim dividend, dispose of €2 billion of non-core assets, sell and lease back real estate and pay its full-year dividend in shares to boost its solvency by €8.3 billion. (Reuters)