AIB begins to buy back bailout shares worth €91m from State
IRELAND’S largest bank is to hand back €91million of its bailout from the Government by buying back some of the shares owned by the State.
AIB received €9.5billion from taxpayers after the financial crash of 2008 to save it from collapse.
The State’s shareholding hit 99.8% at one point but it has dropped to just below 70% by selling shares on the stockmarket, and the share buyback by AIB will reduce it further.
The bank is listed on both the Dublin and London stock markets. The buybacks began yesterday and ‘may continue until December 30 subject to market conditions’, AIB announced.
Finance Minister Paschal Donohoe said he ‘accepted an offer’ from AIB to participate in a share buyback programme that will see the company acquire €91million worth of its shares.
The buyback will be on top of a €122million dividend to shareholders.
Mr Donohoe agreed to sell back enough shares to avoid the State’s ownership of AIB going above its current level. The directed buybacks are expected to take place on a daily basis using the relevant closing price, and the aggregate amount paid to the State is expected to be around €64million.
The minister also agreed to more buybacks that would reduce the State’s shareholding in the bank even further, but subject to the total amount of the share buyback programme not exceeding €91million. Mr Donohoe said: ‘Participating in this buyback programme on a proportionate basis is a positive step both for AIB and the State, as its largest shareholder, and will enable us to recover more money for citizens.’
He added: ‘When combined with the annual dividend, the State expects to receive a total of approximately €149million from the company, which will be returned to the Exchequer and used for productive purposes.’
AIB boss Colin Hunt said: ‘This positive development will enhance shareholder value for all investors. Additionally, it will facilitate the repayment of funds invested into AIB on behalf of the Irish State, for which we are grateful.’