Stress tests no threat to EBS sale -- Cardinal
Published 30/03/2011 | 05:00
THE Cardinal consortium yesterday insisted the latest banking stress tests posed no threat to their efforts to buy EBS -- even though the building society could need hundreds of millions in further state cash.
The Cardinal grouping, which is backed by US private equity, recently emerged as the preferred bidder to take EBS out of state ownership.
When the deal was put together, the State was set to inject €438m into EBS by the end of February to bring the building society's capital up to regulatory standards.
EBS is likely to need even more capital under when the results of the latest banking stress tests are revealed tomorrow, with some suggesting an additional demand of several hundred million euro.
Some believe this would put the deal in jeopardy, since the State may not want to plough even more money into EBS and then hand it over to Cardinal. It equally is believed not to be keen on stumping up the additional demand.
A spokesman for the consortium last night insisted that the bid was progressing well and would be unaffected by the announcement of the stress test results.
Cardinal could potentially get around the additional capital demands by offering the Government a significant stake in the healthy bank that emerges.
The next best bid for EBS came from IL&P.