Monday 20 November 2017

Bank of Ireland starts talks with potential investors

Bank of Ireland: Government to remain a minority shareholder. Photo: Getty Images
Bank of Ireland: Government to remain a minority shareholder. Photo: Getty Images

Louisa Fahy

Bank of Ireland has said it started talks with potential institutional investors about a fundraising.

The Government is likely to remain a minority shareholder under the plan, which includes a rights offer, a share placing with investors and conversion of part of the Government’s preference stock into common shares, Bank of Ireland said today in a statement.

Bank of Ireland needs €2.7bn to meet new capital requirements, Finance Minister Brian Lenihan said on March 31. The bank is among lenders selling toxic property loans at a discount to the National Asset Management Agency, and it will be left with a shortfall.

Bank of Ireland will seek to raise as much as €3.3bn, a person with knowledge of the matter said last week.

“It has started the clock ticking in relation to the rights issue and for the two biggest banks to begin their capital raising,” Oliver Gilvarry, the head of research at Dolmen Securities, in Dublin, said by phone.

Bank of Ireland rose 1.7 cents, or 0.9pc, to €1.84 at 9:07am in Dublin, giving the company a market value of €2.2bn.

Bank of Ireland said last week it may sell some business units to win European approval for a reorganisation plan after a government bailout.

That gave investors more “visibility” and meant capital-raising events were under greater control, Chief Executive Officer Richie Boucher said at the time.

A further announcement will be made “in due course,” the bank said today.


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