Noonan aims to offload IL&P's insurance arm in trade sale
Published 24/06/2011 | 05:00
The Government is hoping to sell Irish Life & Permanent's insurance arm as part of a trade sale instead of offloading it to investors in a share flotation according to Finance Minister Michael Noonan.
Speaking at the Financial Services Ireland annual members' lunch yesterday, Mr Noonan said the process will begin shortly.
"We are within weeks of being able to announce that we are going to market to sell the insurance side," he said. "In the first instance we hope to do it by a trade sale. If that does not work, there are obviously other options."
IL&P plans to send a memorandum of understanding to potential buyers who have expressed an interest in the firm's insurance arm in the next couple of weeks.
The minister said that Anglo Irish Bank, which has now begun the process of selling its $10.3bn loan book of US commercial property, should complete that transaction by the end of August or early September.
The money raised from this sale will be paid back to the Central Bank which lent emergency loans to the now failed bank at the height of the financial crisis.
The Government has made progress on burden-sharing with bondholders, he said, referring to AIB's recent decision not to pay out fully on subordinated bonds that will yield savings of €1.6bn.
Mr Noonan said that money would otherwise have had to come from the taxpayer.
This exercise is part of the Government's plans to save about €5bn through deals with junior bondholders in the four Irish banks that will force them to accept huge haircuts or discounts on the debts they are owed.
The department will continue to be hands-on in dealing with the banks' non-core assets but will "pull back" on the banking side to let the new boards and directors run the banks.
"We don't want the banking side to be run by civil servants," he said. "There is no future in that". The banks need to get back to "old-fashioned banking," he added.