My understanding is that the Precious Medals division has been the most successful arm for Fortis. Hopefully the new owners decide to keep it intact, in one form or another. There is a lot of incentive to maintain a Precious Medals arm, as the gold price is expected to stay strong for several years into the future.
Here is the latest on the Fortis sale:
"LUXEMBOURG, (AFP) - French bank BNP Paribas will take control of ailing finance group Fortis's operations in Belgium and Luxembourg, a source close to the Luxembourg government said Sunday.
An agreement was reached after a weekend of talks between the parties under which France's biggest bank will take up 75 percent of Fortis' Belgian operation leaving the other 25 percent, a blocking minority, in the hands of the Belgian government.
On the Luxembourg side, BNP Paribas will take 66 percent of the shares leaving the Grand Duchy with 33 percent, the source said.
Fortis ran into liquidity problems which originated with the US-born financial crisis.
On Friday the Dutch government totally renationalised the group's Dutch arm."
2 comments:
As a side note, there appears to be stong precedence that companies are moving away from general commodities (due to the slowdown), BUT are retaining their Precious Medals divisions (as they recognize the profitability potential).
Here is a clear example from just this past Friday:
"UBS to Exit Commodities, Excluding Precious Metals (Update2)"
By Feiwen Rong and Chanyaporn Chanjaroen
"Oct. 3 (Bloomberg) -- UBS AG, the European bank hardest hit by the credit crisis, will stop over-the-counter trading in natural gas, crude oil, power, agricultural products and industrial metals as it cuts jobs to reduce costs.
The Zurich-based bank will retain its precious metals trading operations, started about a century ago, its commodities index unit and exchange-traded commodity derivatives business, spokesman Dominik von Arx said today by phone from London. He declined to say how many jobs would be cut."
With a likely negative response from Fortis (since they had to be bailed out themselves), it's a question of time when CMM has to declare bankruptcy. That's what I see in the 2 cent stock price. At least we'll be able to claim a whopping capital loss come next spring!
bigjohnj37
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