BoI expected to announce details of its €3.3bn deal on Monday
Published 23/04/2010 | 05:00
BANK of Ireland boss Richie Boucher has been holding more than a dozen meetings and conference calls a day in London for much of this week as he courts large investors ahead of announcing a €3.3bn capital-raising after the weekend.
Monday has been provisionally pencilled in for an announcement on the largest and most complex equity-raising deal in Irish corporate history, according to well-informed market sources.
The bank confirmed yesterday that the transaction is expected to comprise a rights issue, share placement with big investors, partial conversion of the Government's existing investment into ordinary stock, and a so-called 'liability management'.
The liability management is set to consist of some of the holders of its riskier bonds -- or tier-one subordinated debt -- converting into equity holders.
Chief executive Richie Boucher and finance director John O'Donovan started out this week by meeting large investors in Dublin.
The meetings are being choreographed by the five brokers lined up to underwrite -- or guarantee -- the rights issue and placement.
These include Credit Suisse, UBS, Deutsche Bank, Citigroup and Ireland's Davy. They are expected to share more than €60m of underwriting fees between them.
"Based on the current envisaged structure, the bank expects that the State would continue to be a minority shareholder in the bank," the bank said yesterday, adding that a "further announcement will be made in due course".
It is understood that the State will end up with about a 35pc stake in the bank after the six-week process is completed.
NCB Stockbrokers analyst Ciaran Callaghan said: "Assuming that the group carries out a €1bn rights issue, placing of €500m, liability management initiatives to generate €500m and a conversion of €1.3bn of preference shares ... existing shareholders would own less than 50pc of the bank after the recapitalisation."