Ireland Said to Weigh Taking Majority Ownership in Allied Irish
Sept. 30 (Bloomberg) -- The Irish government is in talks with Allied Irish Banks Plc that may result in the state taking majority ownership of the company, the nation’s second-largest lender, said two people with direct knowledge of the discussions. The talks are centered on whether Allied Irish, 18.7 percent owned by the government, needs to raise more than the 7.4 billion euros ($10.1 billion) Ireland’s financial regulator directed it to raise in March, people briefed on the matter said yesterday. A decision is set to be announced before European markets open today, one of the people said. One option under consideration involves the government partly converting its 3.5 billion euros of preferred shares in the bank into ordinary shares, according to one of the people. The government would convert the remainder of its preference shares if Allied Irish, led by Managing Director Colm Doherty, isn’t successful in raising capital from shareholders, the person said. Ireland’s banks are raising capital after bad debts surged as a decade-long real estate boom collapsed. Finance Minister Brian Lenihan may lay out Allied Irish’s capital needs today, when the government is due to detail the final cost of bailing out Anglo Irish Bank Corp. Lenihan has previously said the government would make up any Allied Irish capital shortfall by the end of the year if it couldn’t raise enough cash on its own. Lenihan may announce an injection of between 2 billion euros and 3 billion euros into Allied Irish, the Financial Times reported yesterday, without saying where it got the information. Lenihan told the Dublin parliament yesterday that he would announce the final cost of bailing out Anglo Irish today. Alan Kelly, general manager of corporate services at Allied Irish and Eoin Dorgan, a Finance Ministry spokesman, declined to comment. Neil Whoriskey, a Central Bank spokesman, also declined to comment. Allied Irish said on Sept. 10 it will raise 2.5 billion euros of capital by selling its Polish unit, Bank Zachodni WBK SA, to Banco Santander SA, Spain’s biggest bank. http://www.businessweek.com/news/2010-09-29/...p-in-allied-irish.html
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