The recapitalisation of Allied Irish Banks is expected to go ahead despite the hopes of small shareholders who will have their holdings wiped out.
The move was expected as the State already owns over 93pc of AIB and this stake is set to rise to 99.8pc.
While individual shareholders voiced concerns about having the value of their holdings wiped out through the deal at an extraordinary general meeting today, the recently merged AIB and building society EBS needs to raise €14.8bn.
So far, €2.1bn of this has already been raised by imposing cuts on unsecured bondholders or creditors leaving €12.7bn.
However, it is understood that the State will have to make up the lion’s share of the shortfall as finding private investors is considered unlikely in the short to medium term.
AIB executive chairman David Hodgkinson acknowledged the erosion of shareholder value since the banking crisis started.
“It has to be said yet again by people like me, so that we cannot forget, that serious mistakes were made in this Bank which can’t be allowed to happen again,” he said,
“The Government has had to put an enormous amount of taxpayers’ money into AIB in order that we can help put things right both for our customers and the wider economy.”