Dáil Éireann Debate, Tuesday - 6 November 2012
198. Deputy Pearse Doherty asked the Minister for Finance further to reports that Allied Irish Banks, in which he is the shareholder of 99.8% of the shares, has sold a portfolio of loans with a nominal value of €675m to Lone Star, if he will confirm the quantum of fees and commissions that AIB is paying to organisations which were engaged to assist with the sale, including fees paid to Morgan Stanley and legal fees. [47282/12]
View answerThe sale of loan portfolios and the appointment of advisors is a commercial matter for the management and the board of the bank. I do not have a role in this function. However, AIB has informed me that EBS Limited has contracted to sell to Vesta Mortgage Investment Limited, (an affiliate of Lone Star), approximately €660 million nominal of loan assets as part of its continuing strategy to meet its non-core de-leveraging targets. The portfolio is primarily comprised of non-core Irish commercial real estate loans originated by EBS Limited.
The purchaser was selected following the completion of a comprehensive two stage competitive auction sales process involving a number of credible international investors. This transaction was approved by the boards of both EBS and AIB and AIB's de-leveraging committee which includes non-voting observers from my Department and the Central Bank.
AIB has further informed me that it typically engages external parties to advise it on sale processes in order to avail of relevant and necessary experience and expertise. AIB does not disclose the amounts paid to these advisors for commercial reasons. As AIB has a strong focus on minimising the costs to the bank of these expert advisors, in each case, the bank undertook a competitive tendering process to select the advisors to assist in this sale process. These processes focused on relevant experience, product knowledge, quality of advisory team and fee structure. Furthermore, in the case of the sales advisor, fees were structured to incentivise the advisor to assist in maximising value for the bank and its stakeholders.
This sale brings AIB’s total net non-core de-leveraging to date to 80% of AIB’s three year PLAR de-leveraging target of €20.5 billion. AIB remains on course to complete the majority of its total 2013 de-leveraging targets by year end 2012 and to achieve this target in line with PCAR capital requirements assumed under the March 2011 exercise.
