Friday 24 November 2017

PTSB now nears end of €525m capital search

Chairman Alan Cook at the Permanent TSB shareholder meeting in Dublin’s Ballsbridge Hotel yesterday. Photo: Tom Burke
Chairman Alan Cook at the Permanent TSB shareholder meeting in Dublin’s Ballsbridge Hotel yesterday. Photo: Tom Burke
Gavin McLoughlin

Gavin McLoughlin

Permanent TSB's management has met 95 potential investors as it seeks to return to private ownership.

The 99pc State-owned bank is looking to raise €525m, €400m of which would be returned to the Irish taxpayer.

Chairman Alan Cook told shareholders at the bank's agm that management would be making "key decisions" on the structure of the capital raising in the coming weeks.

Chief executive Jeremy Masding said the bank will be meeting more potential investors this week.

"I think we're now narrowing down the journey to a decision, so I'd expect us to be able to give you much more information in the next few weeks."

He said he was confident that within current market conditions the fundraising exercise would not lead to the Government losing its position as majority shareholder.

"We were set as a goal that the Minister for Finance still wanted to retain majority ownership, and we were tasked with trying to find a deal that did that, so as of this morning I am confident that we can deliver that objective," Mr Masding said.

"These guys on the other side of the table are razor-sharp, this is real capital markets stuff, these are guys who control an enormous amount of dollars.

"We have been put through the ringer, we have a baseline business plan. We're very clear that there are risks and opportunities to that plan, and from what I can see investors buy into the fact...that this organisation can deliver a net return for them."

Mr Masding said investors were asking about the prospect of a cut in the bank's 4.5pc variable mortgage rate.

He said the bank hadn't made a decision on whether to complete the capital raising as an initial public offering (IPO), but he said that if the bank did proceed in that manner he hoped there would be a full listing on the Dublin and London stock exchanges.

Another option is that the bank would raise money through a private placement.

The agm was punctuated by hostile questioning from shareholders.

Multiple shareholders sought to have a motion introduced that if approved would have seen the bank raise €125m rather than €525m. Company secretary Ciaran Long said that to put a motion before the meeting, a shareholder would have to own 3pc of the company, meaning Finance Minister Michael Noonan would have been the only shareholder authorised to bring a motion forward.

Piotr Skoczylas, who leads a shareholder group that has brought the Government to court over the decision to take control of Permanent TSB, said the bank only needed to raise €125m to meet ECB capital requirements.

The more money is raised, the more shareholders would see their holdings diluted.

The bank's chief financial officer, Glen Lucken, said that under the bank's restructuring plan, €400m of so-called contingent capital had to be converted into shares in order to meet ECB requirements, meaning a total of €525m would have to be raised.

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