Irish Life's sale likely to drag into early 2012
THE sale of Irish Life is likely to drag on into early next year but the delay won't force a temporary recapitalisation of the plc if the disposal is "progressing" and a buyer is in sight.
The news comes as Irish Life & Permanent (IL&P) bosses continue to engage with a quintet of would-be buyers ahead of a mid-October deadline for second-round bids.
The Government had been hoping to achieve the sale of Irish Life by the end of the year, but market sources say this is now extremely unlikely despite a healthy level of business.
While the sale is outstanding, IL&P has €1.1bn less capital than the demand of March's stress tests -- breaching one of the original conditions of Ireland's IMF/EU/ECB bailout.
The last "memorandum of understanding" on the bailout said the situation was to the "reviewed" in October.
It is understood that the troika is unlikely to force Ireland to put in the €1.1bn pending the sale.
"Once you put capital in, it's very hard to get it out," one source said. "If the disposal is on track and the delay is reasonable, it would make sense to wait."
A spokesman for the Department of Finance declined to comment in detail on the sale process, but said that the separation of IL&P's life and banking businesses was "well under way, both operationally and in terms of the disposals of the life and fund management business".
It is understood that management have been telling bidders that the "working assumption" is that all of IL&P's group executives, led by chief executive Kevin Murphy and finance boss David McCarthy, will become part of the life business.