State may be forced to stump up more cash for AIB
Published 23/06/2011 | 20:22
Taxpayers could end up having to take more control of Allied Irish Banks after the institution entered discussions with the Government on how it can raise the capital necessary to satisfy recent stress tests.
The State already owns 93pc of the bank. But AIB and EBS, which recently announced a merger, combined need to raise over €14bn to pass the tests.
If the Government has to cough up more cash to buy shares in the bank, any subscription by it for stock would result in potentially significant additional dilution for existing ordinary shareholders other than the State.
It is expected that discussions with the Government will end within a week and AIB then expects to be in a position to announce the final terms and structure of any capital raising transaction with the State.
However, AIB expects to remain as a listed company which will allow shareholders to continue to trade their shares.
Shares in the bank closed this evening at 15.6c.
AIB made the announcement after the stock market closed.