Published on
Minister for Finance to exit Bank of Ireland Preference shares and recoup a premium on the initial €1.8 billion investment
* Negotiations concluded on transaction that includes Sale and Redemption of Preference Shares
* State to exit its €1.837 billion of Preference Shares held in Bank of Ireland at a profit.
* Transaction will build further confidence in Ireland’s recovery and will strengthen Ireland’s return to normal market funding.
The Minister for Finance, Michael Noonan T.D., has today (4th of December 2013) announced that the negotiations with Bank of Ireland on the Preference Shares have been successfully concluded.
The completion of this transaction will see the State exit its €1.837 billion of Preference Shares held in Bank of Ireland at a profit. The State will exit its investment via a) the sale of €1.3 billion of the Preference Shares to private investors and b) the redemption of €537 million of the Preference Shares at a price of par which will be financed by the Bank through a placing of new equity.
The exact terms of the transaction and the return to the State will depend on the outcome of two separate capital market book build exercises that will now be conducted by a consortium of banks.
Welcoming the conclusion of the negotiations with Bank of Ireland the Minister for Finance stated:
“I am pleased to announce that agreement between the Department of Finance and Bank of Ireland on the State’s exit from the Preference Share investment has been reached. The successful conclusion of this transaction will see the State recoup a premium on its €1.8 billion investment thus generating a profit for the taxpayer.
As we exit our EU/IMF Programme on the 15th of December, this transaction will build further confidence in Ireland’s recovery and will strengthen Ireland’s return to normal market funding.
The Irish banking system is recovering, international investors are returning and this has positive implications across the banking system.”
The Department of Finance is being advised on this transaction by Goldman Sachs International.
Goldman Sachs International is acting for the Department of Finance and no one else in connection with the matters described herein and will not be responsible to anyone other than the Department of Finance for providing the protections afforded to clients of Goldman Sachs International, or for giving advice in connection with the matters referred to herein.