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(Alliance News) - The Irish government on Tuesday said it intends to sell part of the state's 71% stake in lender AIB Group PLC through a trading plan managed by Merrill Lynch International.
Minister for Finance Paschal Donohoe has instructed the US investment bank, part of Bank of America Corp, to target a sale of up to, but no more than, 15% of the expected aggregate total trading volume in shares of AIB. The government said the total number of shares sold will depend on market conditions.
"Given the thinner liquidity in AIB shares, I expect the pace of share sales to be slower than what we've seen at Bank of Ireland [Group PLC], but it is important that we make further progress on what will be a multi-year journey," Donohoe said.
The Merrill Lynch-led programme will begin in mid-January and run for six months.
AIB has a market capitalisation of about EUR5.76 billion. The stock was down 4.2% to 175.80 pence in London early Tuesday.
In response, AIB welcomed the government plan to further sell down its shareholding, saying: "It is an important development in the process of returning the state's investment in the group."
AIB Chief Executive Officer Colin Hunt said: "AIB owes the Irish taxpayer an immense debt of gratitude for its support during the financial crisis. The group's robust balance sheet, its digital capability and the scale of its operations means it will continue to play a key role in supporting the Irish economy and our customers."
Finance Minister Donohoe added: "The bank's financial performance has improved significantly while investor appetite for banks is also recovering, so these conditions provide a supportive environment to reduce our shareholding in the bank over time."
By Tom Waite; thomaslwaite@alliancenews.com
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