AIB shareholders vote to repay first tranche of €21bn in bailout funds
AIB shareholders have voted on a capital reorganisation plan that will see the lender repay the first tranche of its bailout funds to the Government.
At the Extraordinary General Meeting at the bank's HQ, shareholders voted on whether to back the lender's reorganisation plan, which will see about €1.7bn repaid to the State. This is the first time the bank has paid money it received as part of its €21bn bailout during the financial crisis.
The official tallies of the vote will be known this afternoon but the overall result is not in doubt. The Government owns some 99.8pc of the bank and has already signalled its support for the plan.
Under the reorganisation, AIB will pay €1.7bn to the State from the partial redemption of preference shares issued to the Government in 2009. As well as this, the maturity of the Contingent Capital Notes will result in a further repayment of €1.6bn of capital to the State on next July.
The remainder of the preference shares will be converted into ordinary shares that will result in a net increase in Tier 1 Capital of €1.8bn.
Apart from the repayment plan, shareholders will also sign off on a reorganisation of AIB shares. The plan will see AIB shares consolidated on the basis of one new share for every 250 old shares.
AIB chairman Richard Pym said the reorganisation was a crucial step in the bank's recovery.
“These proposals are designed to provide a solid capital base for the company to ensure its future success,” he said.
While the share consolidation plan would theoretically mean the share price should rise sharply, Mr Pym warned that this may not be the case.
The one for 250 shares consolidation does not mean that the new trading price will increase by 250 times, he warned.