BRUSSELS (Bloomberg) - Fortis chairman Jozef De Mey said he expects shareholders to approve a new agreement for BNP Paribas SA to buy Fortis's former banking units in Belgium and Luxembourg and take a stake in the insurance business.

"We do feel relatively comfortable that we will get a positive vote on this deal because we can definitely show that compared to the deal presented to shareholders in February, this one is better," Mr. De Mey said on Saturday on a conference call.

Under the new agreement, the net asset value has been improved by 510 million euros ($645 million) compared with the deal that was blocked by shareholders last month, and the cash position has increased by about 1 billion euros, Mr. De Mey said. "This will put the holding in a better position to look at possibilities for future development," he said.

BNP Paribas will become the biggest bank by deposits in Belgium and Luxembourg, two of Europe's wealthiest nations, if it wins over Fortis investors. Belgium is seeking to sell the Fortis banking operations after the September collapse of Lehman Brothers Holdings Inc. and the freezing of credit markets triggered state bailouts of Fortis and Dexia SA.

The French bank will buy 75 percent of state-owned Fortis Bank NV and gain control of the Luxembourg banking unit for 2.88 billion euros in stock, the Belgian government said. Fortis Bank will then pay 1.38 billion euros in cash for 25 percent of Fortis Insurance Belgium SA.

The Belgian government will provide 740 million euros of equity funding to a company created to split off 11.4 billion euros of risky assets into a separate entity. BNP Paribas will contribute 200 million euros to the risky-asset entity and Fortis will provide 760 million euros.

Fortis Bank will contribute the remaining 9.7 billion euros in debt funding, backed by a 4.36 billion-euro guarantee from Belgium. The structured-credit investments have been marked down to about 58 percent of par value, Belgian central bank Deputy Governor Luc Coene told reporters in Brussels.

"The only negative of this is that it increases the risk profile" of the risky-asset entity, Albert Ploegh, an analyst at ING Wholesale Banking in Amsterdam, said by telephone today. Overall, the new agreement is "an improved deal", he said.

BNP Paribas also obtained a 1.5 billion-euro state guarantee on losses exceeding 3.5 billion euros on the structured-credit holdings that remain within Fortis Bank. Once Belgium's largest financial-services company, Fortis will emerge from the state-organised breakup as an insurer with the right to potential gains on Belgium's stake in BNP Paribas.

"This solution guarantees the bank's safety and future," BNP Paribas CEO Baudouin Prot said. "This is very important for the Belgian economy at a time when its banking industry is going through a difficult period."

Fortis shareholders blocked an earlier agreement to sell units to BNP Paribas on February 11. Mischael Modrikamen, a lawyer representing 2,300 Fortis investors holding 0.6 percent of the shares outstanding, said there is not "any objective reason" for investors to support the new agreement. Modrikamen won a December 12 court injunction on the prior deal pending the shareholder vote.

"Compared to the previous deal, there is absolutely nothing favourable for shareholders" of Fortis, Mr. Modrikamen told Belgian broadcaster RTBF. The new arrangement includes "some elements" of the earlier plan, "but they have been adapted for the benefit of BNP Paribas and not in favor of Fortis Bank".

Dutch shareholder group VEB, which represents investors holding about one percent of Fortis, indicated support for the new agreement, calling it "a slight improvement" in an e-mailed statement. Chinese insurer Ping An Insurance (Group) Co., Fortis's largest shareholder with a stake of almost 5 percent, is "studying the situation", L'Echo newspaper reported, citing a Ping An lawyer it did not identify.

ING's Ploegh said the changes made in the new deal "should be enough" to secure the backing of Fortis investors. "The holding has improved its cash position and the net asset value has increased," he said.

All Fortis investors will be able to vote on the transaction, CEO Karel De Boeck said. At the February 11 meeting, only those investors who held Fortis shares as of October 14 were eligible to cast ballots following a December court injunction blocking the asset sales.

Fortis became a casualty of the global financial turmoil after spending 24.2 billion euros buying ABN Amro Holding NV assets in the biggest bank takeover just as the US sub-prime mortgage market collapsed and credit markets froze. The bank and insurer was forced to sell most of its businesses over three days last October after running out of short-term funding and seeing its share price plummet.

Belgium nationalised Fortis Bank for 9.4 billion euros in two transactions on September 29 and October 10, and Luxembourg agreed to take 49.9 percent of the banking unit in that country. The Netherlands bought Fortis's Dutch banking and insurance businesses for 16.8 billion euros on October 3.

The purchase of Fortis Bank will not improve BNP Paribas's capital-adequacy ratios as originally planned. The Belgian bank said it had a fourth-quarter net loss of six billion euros, based on preliminary figures.

"It was an absolute minimum for us that the transaction would be neutral for our capital ratios," BNP Paribas chief financial officer Philippe Bordenave said in an interview on Saturday in Brussels.

BNP's Tier 1 capital ratio, a measure of a bank's ability to absorb losses, stood at 7.8 percent on December 31. That compares with 9.1 percent at Credit Agricole SA and 8.8 percent at Societe Generale SA, France's second and third-largest banks. Fortis Bank's Tier 1 ratio was "about 10 percent," the state-owned Belgian bank said on Saturday.

Belgium also agreed to shore up Fortis Bank's capital to a maximum of two billion euros should the lender's Tier 1 ratio fall to less than 9.2 percent. The capital infusion could raise the government's stake in Fortis Bank to as much as 49.9 percent.