(Alliance News) - Ireland's minister for finance, Paschal Donohoe, on Wednesday said the government plans to sell some of its stake in Bank of Ireland Group PLC over the next six months.
The Irish state owns around 150.4 million shares, representing just under a 14% stake, in the Dublin-based commercial bank. The sales will be arranged by Citigroup Global Markets.
"Under the trading plan, Citi have been mandated to effect a measured and orderly sell down of shares in the company on behalf of the minister. The minister has instructed Citi to target that up to, but no more than, 15% of the expected aggregate total trading volume in the company is to be sold over the duration of the trading plan. The number of shares sold will depend on market conditions, amongst other factors," the Department of Finance said.
However, to protect the interests of taxpayers the Irish government instructed that shares not be sold below a minimum cap, which the department will continue to review.
The Irish government stepped in to buy a stake in the company in 2009 amid the global financial crisis. The state pumped a total of EUR29.4 billion into Bank of Ireland, AIB Group PLC and Permanent TSB Group Holdings PLC over 2009 to 2011.
Bank of Ireland on Wednesday welcomed the sale as a "positive step" for Ireland and its economy.
Bank of Ireland's chief executive, Francesca McDonagh, said: "State investment in Bank of Ireland over a decade ago should never have been needed, but we will always be grateful for the support we received. We repaid the taxpayer by 2013, and again thank the state and Irish taxpayer for their extraordinary support."
The finance minister said Wednesday's announcement "marks the start of a phased exit" from the government's remaining stake in the company.
"When all cashflows are taken into account the taxpayer has already recorded a surplus on its investment in and support for the bank, even before the sales of these shares are accounted for. A trading plan enables the state to sell down its shares in a low cost carefully controlled manner while avoiding the need to try to time our disposals with market conditions," said Donohoe.
The finance department noted that the UK government used a trading plan when selling down its remaining 24.9% stake in Lloyds Banking Group PLC over 2014 to 2016.
Bank of Ireland shares were trading down 4.5% at EUR4.29 each in London on Wednesday morning.
By Scarlett Butler; scarlettbutler@alliancenews.com
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