The government has extended the AIB share trading plan, having paused trading in November following the latest accelerated sell-off of shares in the bank.
The state has generated €121.5m in funds from sales of shares in the bailed-out lender at €2.85 per share in phase two of the plan, with phase three set to commence imminently following Minister for Finance Michael McGrath's decision to extend the plan.
McGrath said the plan had helped the state to gradually reduce its stake in AIB, from 71.12% to 57%, and improve liquidity in the shares since it began in January 2022. In total, c. €286.4m has been raised from the AIB trading plan since it started.
The second phase of the share trading plan was paused on 7 November and was due to end on 24 January before the extension was announced. Trading will resume in the coming days and will end no later than 23 July, unless further extended by the Minister.
“Given the success of the AIB trading plan since it became operational a year ago, I can see the merit in renewing the trading plan into a third phase," McGrath said.
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"The plan has played an important role in reducing the state’s shareholding in AIB to c.57% currently, and I hope that it will continue to play a role in the future alongside other monetisation options, should they present themselves.”
The state spent €64bn bailing out Ireland's banks following the crash. The state sold the last of its shares in Bank of Ireland in September.
Its interest in Permanent TSB was reduced from 75% to 62% when NatWest took a minority stake in the bank in November when PTSB completed its purchase of Ulster Bank mortgages worth €5.2bn.
AIB shares will not be sold below a pre-determined floor price, which will be kept under review by the Department of Finance, and Merrill Lynch International (BofA Securities) will continue to execute the trading plan act on behalf of the Minister.
BofA Securities will continue 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, among other factors. The Department of Finance is being advised on the plan by N.M. Rothschild & Sons Limited and William Fry LLP.
Colin Hunt, CEO of AIB, welcomed the government's decision, commenting that it is "an important development in the process of returning the State's investment in the group."
(Pic: Leah Farrell/RollingNews.ie)
