EC approves €3.8bn recapitalisation of ILP

The European Commission has granted temporary approval, under EU state aid rules, to a government recapitalisation worth up to €3.8bn for Irish Life & Permanent.

EC approves €3.8bn recapitalisation of ILP

The European Commission has granted temporary approval, under EU state aid rules, to a government recapitalisation worth up to €3.8bn for Irish Life & Permanent.

In a statement, the Commission said: "The recapitalisation is necessary to increase the bank's solvency ratios, thereby enabling it to resist potential stress situations and preserving stability on the Irish financial markets.

"The Commission will take a final decision on the state measures in favour of IL&P on the basis of the new restructuring plan that Ireland committed to submit by the end of July to take account of this additional state support."

The EU-IMF bailout included a capital assessment review of all banks subject to the programme.

The review carried out by our own Central Bank identified capital needs of €4bn for IL&P. In a first stage, to be implemented by July 31 this year, the Government will buy ordinary shares in IL&P for €2.3bn and contingent capital notes for €0.4bn.

In a second stage, the Government will provide up to €1.1bn of additional capital if the capital raising measures recently launched by IL&P fail to raise the remaining amount of capital needed to satisfy the requirements identified by the central bank review.

€200 million of capital will be provided by the group itself.

Irish Life and Permanent will hold an emergency meeting of shareholders this morning to discuss a recapitalisation plan for the bank.

Shareholders are being asked to approve the €3.8bn cash injection from the Government, which would result in 99% of the bank's ownership transferring to the Government. It is reported they may reject the bailout.

more courts articles

Man (25) in court charged with murdering his father and attempted murder of mother Man (25) in court charged with murdering his father and attempted murder of mother
Man appears in court charged with false imprisonment of woman in van Man appears in court charged with false imprisonment of woman in van
Man in court over alleged false imprisonment of woman Man in court over alleged false imprisonment of woman

More in this section

Mother and daughters killed in Mayo crash named locally, as husband returns to Ireland 'Their smiles lit up the room': Tributes paid to mother and daughters killed in Mayo crash
Irish constitution referenda Transport Minister does not envisage congestion charges in near future
McEntee: Group using arson to 'sow division and fear' in communities Four arrests in connection with fire at hotel earmarked for asylum seekers
War_map
Cookie Policy Privacy Policy Brand Safety FAQ Help Contact Us Terms and Conditions

© Examiner Echo Group Limited