ILP shareholders bid to block sale of Irish Life to State
Shareholders of Irish Life and Permanent have brought a legal challenge aimed at blocking the Minister for Finance from purchasing the group's life assurance business, the Irish Life Group, for €1.3bn.
Last month the President of the High Court made direction orders, under Section 9 of the Credit Institutions (Stabilisation) Act 2010, allowing Minister Michael Noonan to purchase Irish Life from ILPG.
The proposed sale is part of the recapitalisation of Irish Life and Permanent (ILP) as required by the Central Bank, the EU Commission, the IMF and the ECB and will result in the complete separation of ILP's life assurance and banking businesses.
The court was told that the Minister's decision to purchase the business "would benefit ILP by €1.3bn," was in the best interest of the State, the company and the shareholders."
However earlier this week a group of shareholders of ILP's parent company Irish Life and Permanent Group Holdings PLC Mr Gerard Dowling, Mr Padraig McManus and Mr Piotr Skoczylas, and Mr Skoczylas's company the Malta-based Scotchstone Capital Fund Limited, initiated High Court proceedings seeking to have the Court's direction orders set aside.
At today's vacation sitting of the High Court Mr Justice Patrick McCarthy granted Irish Life and Permanent permission to bring a motion seeking to have ILP included as a notice party to the shareholder's challenge.
Barrister Brian Kennedy Bl for ILP told the court that anything concerning the proposed €1.3bn sale of Irish Life to the Minister would have an impact on his client. Counsel also asked the court that the matter be given priority.
ILP's motion was made returnable before Mr Justice Kearns when the courts return from their Easter holidays later this month.
Last month in approving the proposed sale Mr Justice Kearns was informed the Minister had decided to purchase Irish Life after attempts to sell the business to private bidders failed. The Minister decided to acquire Irish Life following consultations with both legal and economic advisors.
The Judge was also informed that proposed sale limits the potential for contagion of Irish Life from Permanent TSB and allows for more management focus on the respective separated businesses.
A report from the rating agency Standards & Poors indicated that the separation of Irish Life will result in its credit rating being raised.
Mr Justice Kearns also made a number of orders including ones allowing ILP to enter into a share purchase agreement with the Minister in respect of the entire issued share capital of Irish Life, enter into asset transfer agreements, as well as a confidentiality and data retention agreement.
The Government owns more than 99.5% of Irish Life & Permanent after injecting €2.7bn into ILP in July of last year.
However in separate legal proceedings currently before the High Court Mr Skoczylas, his company, Mr Dowling and Mr McManus have challenged that move on grounds including that recapitalisation has put an unacceptable burden on Irish and EU taxpayers.
