Eurozone deal might boost Irish Life price
Published 30/10/2011 | 05:00
THE surge in European banking shares that followed last week's deal between European leaders to try and solve the eurozone crisis, with the Stoxx 600 index of European banking shares jumping almost 8 per cent on the news, is good news for the Government as it attempts to find a buyer for Irish Life.
With Irish Life's parent company, Irish Life & Permanent, needing to raise €4bn of fresh capital by the end of the year, the Government had been counting on up to €1.5bn of this amount coming from the sale of the profitable Irish Life life and pensions part of the group.
That's now looking increasingly unlikely with the latest second-round bids, which were received last week, coming in at no more than €1bn.
This will force the Government to pump up to €500m more into IL&P than it had originally planned -- slapping on the fiscal make-up in order to make it a more attractive target.
The sale of Irish Life hasn't been helped by the collapse in pension contributions caused by the recession, the Government's levy on private pension funds and uncertainty over tax relief on pension contributions.
Sunday Indo Business