Sunday 15 December 2019

BoI investor Ross toasts Ireland for 'biting bullet'


Laura Noonan

US billionaire financier Wilbur Ross, who is taking a stake of more than 9pc in BoI, yesterday toasted the Government's latest success in attracting private money in the "re-privatisation of the bank" on US TV network CNBC.

"I think the Irish Government deserves it," he told the TV station. "They really bit the bullet. They cut the total cost of the civil service by 13pc . . . they also refused to put up the corporate tax rate," he said.

"They really are fixing the economy, unlike what I call the Club Med countries, who are not reforming anything."

BoI's successful recapitalisation drove shares up 8pc yesterday, but analysts warned of a "clear risk" to the share price once bondholders are free to sell their stock on August 12.

Some 84 million BoI shares changed hands on the Dublin exchange yesterday, about 40 times average volumes earlier in the year, as markets digested the news that the State's ownership in the bank would fall from 36pc to just 15pc.

Analysts en masse welcomed the result of BoI's €5.2bn recapitalisation which saw the bank secure just over €1bn from a quintet of buyers including Mr Ross, Canadian insurer Fairfax and US investor Fidelity.

But Goodbody warned it still believed the bank's "fair value" was 8.4c a share, against the 10c price paid by new investors and the 11c shares were trading for yesterday. Other analysts speculated the share price was likely to dip on August 12 when bondholders will be able to sell off the 19pc of the company they got in a debt buyback.

"We see this as a clear risk to share price performance in the short term," NCB's banking analyst Karl Goggin wrote in a note to clients.

Irish Independent

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