Brussels: Belgian insurer Fortis Holding said on Monday that it faces a legal claim for €362.5 million from a former financing unit now owned by the Dutch government.

Fortis Holding was once the largest bank in Belgium and the Netherlands but was carved up in an October bailout by both governments that took over or sold off its banking operations, leaving shareholders with near-worthless stakes in a small insurance group.

The company said the Dutch government wants it to pay cash compensation for preference shares in Fortis Bank Nederland Holding, now owned by the Dutch state that are held by a Jersey-based financing unit Fortis Capital Company Limited, or FCCL, also owned by the state.

It says the option of a cash settlement was only ever intended to be used in an extreme situation and that the Dutch government refuses to accept the consequences of its decision or to provide compensation to Fortis Holding, badly battered by the botched bailout and the financial crisis.

Fortis Holding also claims that the original terms of an agreement should see it get new shares in Fortis Bank Nederland Holding in return for the cash payment and that the Dutch state was reluctant to see that happen.

It said it would challenge a suit it expects FCCL to file later today that would seek €362.5 million from Fortis Holding.