Dec 21 (Reuters) - The Irish government said on Sunday it
would inject 5.5 billion euros ($7.68 billion) into the
country's three main banks.
The following are some details of the recapitalisation scheme and of an accompanying package designed to boost bank lending:
KEY DETAILS:
-- The Irish government will buy preference shares in Allied Irish Banks, Bank of Ireland and Anglo Irish Bank.
-- In return the government will receive fixed annual dividends of between 8 percent and 10 percent and will have voting rights ranging from 25 percent up to 75 percent.
-- Payment of dividends to the government will take priority over ordinary shareholders.
-- Banks can redeem the new shares within five years at the issue price or after five years at 125 percent of the issue price.
-- The plans are subject to shareholder, regulatory and European Commission approval.
ALLIED IRISH BANKS:
-- The government will invest 2 billion euros in the bank via the issue of perpetual preference shares.
-- In return, the government will receive a fixed annual dividend of 8 percent, have voting rights in areas such as changes of control or capital structure and be able to appoint 25 percent of directors.
-- The capital injection is likely to take place by the end of the first quarter of 2009.
BANK OF IRELAND:
-- The government will invest 2 billion euros in the bank via the issue of preference shares,
-- In return the government will receive a fixed annual dividend of 8 percent, have voting rights in areas such as changes of control or capital structure and be able to appoint 25 percent of directors.
-- The capital injection is likely to take place by the end of the first quarter of 2009.
-- The government said it had a substantial pool of additional capital available and that Allied Irish Banks and Bank of Ireland had both indicated an interest in a further issuance of up to 1 billion euros each.
ANGLO IRISH BANK:
-- The government will inject an initial 1.5 billion euros of core tier 1 capital via preference shares, which will give the state 75 percent of all voting rights in the bank. The shares will pay a fixed annual dividend of 10 percent.
-- The bank will publish a circular to shareholders on Dec. 23 and an Exceptional General Meeting to vote on the capital increase is scheduled for Jan. 16, 2009.
-- Conditions required of Anglo, but not the other two banks, include changes at management and board level, government representation on the board and delivery of a restructuring plan within six months.
-- The state will make further capital available if required so that it remains a 'sound and viable institution.'
ECONOMIC CREDIT PACKAGE:
-- As part of a credit package designed to inject life into the economy he banks have agreed to:
* Provide at least 10 percent more capacity for lending to small and medium sized enterprises in 2009, subject to demand;
* Develop a new code of practice for business lending with the Financial Regulator;
* Provide an additional 30 percent capacity for lending to first time buyers in 2009, subject to demand;
* Assist householders in arrears on mortgage payments and wait at least six months before enforcing repossession;
* Broaden the provision of basic accounts, promoting them to social groups where bank accounts are less prevalent; and
* Each recapitalised bank will introduce a 100 million euro fund to support environment friendly investments.
(Writing by Paul Hoskins and Jonathan Saul; editing by Gary Crosse) Keywords: IRELAND RECAPITALISATION/ (e-mail: jonathan.saul@reuters.com; +353-1-500-1504; Reuters Messaging: jonathan.saul.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The following are some details of the recapitalisation scheme and of an accompanying package designed to boost bank lending:
KEY DETAILS:
-- The Irish government will buy preference shares in Allied Irish Banks, Bank of Ireland and Anglo Irish Bank.
-- In return the government will receive fixed annual dividends of between 8 percent and 10 percent and will have voting rights ranging from 25 percent up to 75 percent.
-- Payment of dividends to the government will take priority over ordinary shareholders.
-- Banks can redeem the new shares within five years at the issue price or after five years at 125 percent of the issue price.
-- The plans are subject to shareholder, regulatory and European Commission approval.
ALLIED IRISH BANKS:
-- The government will invest 2 billion euros in the bank via the issue of perpetual preference shares.
-- In return, the government will receive a fixed annual dividend of 8 percent, have voting rights in areas such as changes of control or capital structure and be able to appoint 25 percent of directors.
-- The capital injection is likely to take place by the end of the first quarter of 2009.
BANK OF IRELAND:
-- The government will invest 2 billion euros in the bank via the issue of preference shares,
-- In return the government will receive a fixed annual dividend of 8 percent, have voting rights in areas such as changes of control or capital structure and be able to appoint 25 percent of directors.
-- The capital injection is likely to take place by the end of the first quarter of 2009.
-- The government said it had a substantial pool of additional capital available and that Allied Irish Banks and Bank of Ireland had both indicated an interest in a further issuance of up to 1 billion euros each.
ANGLO IRISH BANK:
-- The government will inject an initial 1.5 billion euros of core tier 1 capital via preference shares, which will give the state 75 percent of all voting rights in the bank. The shares will pay a fixed annual dividend of 10 percent.
-- The bank will publish a circular to shareholders on Dec. 23 and an Exceptional General Meeting to vote on the capital increase is scheduled for Jan. 16, 2009.
-- Conditions required of Anglo, but not the other two banks, include changes at management and board level, government representation on the board and delivery of a restructuring plan within six months.
-- The state will make further capital available if required so that it remains a 'sound and viable institution.'
ECONOMIC CREDIT PACKAGE:
-- As part of a credit package designed to inject life into the economy he banks have agreed to:
* Provide at least 10 percent more capacity for lending to small and medium sized enterprises in 2009, subject to demand;
* Develop a new code of practice for business lending with the Financial Regulator;
* Provide an additional 30 percent capacity for lending to first time buyers in 2009, subject to demand;
* Assist householders in arrears on mortgage payments and wait at least six months before enforcing repossession;
* Broaden the provision of basic accounts, promoting them to social groups where bank accounts are less prevalent; and
* Each recapitalised bank will introduce a 100 million euro fund to support environment friendly investments.
(Writing by Paul Hoskins and Jonathan Saul; editing by Gary Crosse) Keywords: IRELAND RECAPITALISATION/ (e-mail: jonathan.saul@reuters.com; +353-1-500-1504; Reuters Messaging: jonathan.saul.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2008. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.