IRELAND - The Irish minister for finance has confirmed the recapitalisation of Allied Irish Bank and Bank of Ireland will be funded by the National Pension Reserve Fund.
It added the necessary amending legislation to the NPRF Act would be introduced in the near future.
Following this recapitalisation, the government said it would not hold ordinary shares in either bank - other than existing NPRF holdings -, but it would have an option to buy shares in five years time at a predetermined strike price.
The recapitalisation package is subject to regulatory approval and the approval of the ordinary shareholders at general meetings.
The government added these proposals had also been designed having regard to the European Commission Recapitalisation Communication and were subject to EU State aid approval.
In addition, it said it was in discussions with the other covered institutions - Irish Life and Permanent, EBS and INBS - concerning their respective capital positions and about the review of the guarantee scheme.
The intention to use NPRF funds was initially announced in December 2008 (www.globalpensions.com: 15/12/08), when the Irish government revealed a recapitalisation programme for national credit institutions of up to €10bn.
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