The Commission approved an emergency recapitalisation worth €3.5 billion that the Irish authorities intend to grant to Allied Irish Bank. The shares to be issued will qualify as 'core tier 1 capital'.
The Commission approved an emergency recapitalisation worth €3.5 billion that the Irish authorities intend to grant to Allied Irish Bank.
The shares to be issued will qualify as 'core tier 1 capital'. They will produce a dividend of 8% payable annually, at the discretion of the bank and in priority to dividends on ordinary shares, with detachable warrants after five years. Dividends on the shares are payable in cash, or - if the bank is not able to pay in cash - in ordinary shares in lieu.
The shares will carry 25% of the voting rights in Allied Irish Bank. The bank can repurchase the shares at par during maximum five years. After that period, shares can be repurchased at 125% of par. No dividends on ordinary shares are allowed when no dividend on the shares to be issued is paid to the Irish State. On purchase of the preference shares, the Irish State will also receive an option to purchase 25% of the existing ordinary shares in the bank (the 'warrants'). This option may be exercised from the fifth to the tenth anniversary of the preferred shares' purchase.
Press release
© European Commission
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