IRELAND - The National Pensions Reserve Fund Commission (NPRFC) has underwritten a €5.4bn ($7.4bn) equity capital raising by Allied Irish Banks.
Through the scheme the Irish government will effectively buy up all the shares and, as it has already bailed out AIB, could end up owning 90% of the bank.
The NPRFC may buy up to €3.7bn of the new shares and can convert €1.7bn of preference shares held since 2009.
AIB said in a statement: "On completion of the equity capital raising it is possible that the NPRFC will own a significant majority stake in AIB. It is intended to structure the transaction in a manner which optimises the ability of AIB to retain its existing stock exchange listings, including appropriate structuring of voting rights, (subject to agreement with the relevant exchanges) even in circumstances where the NPRFC purchases all or substantially all of the underwritten new ordinary shares."
Ireland is facing a bail-out of its financial structure at a cost of up to €50bn after bad debts surged as a decade-long real estate boom collapsed. The rising cost of the bailouts prompted Standard & Poor's to downgrade Ireland's credit rating last month and has pushed up the country's borrowing costs.
Here are key takeaways from our 2019 Asset Allocation Outlook on how we are positioning asset allocation portfolios in light of our outlook for the global economy and markets.
This week's top stories included a Freedom of Information request revealing more than 100,000 savers could face six-figure tax bills as a result of GMP equalisation.
The Pearson Pension Plan has entered into a £500m pensioner buy-in with Legal & General (L&G) in the insurer's first deal of 2019.