Dáil Éireann Debate, Tuesday - 3 November 2015
313. Deputy Michael McGrath asked the Minister for Finance the terms under which Allied Irish Banks can redeem the preference shares which the State holds in the bank; and if he will make a statement on the matter. [37876/15]
Amharc ar fhreagraThe State holds €3.5 billion of preference shares in AIB. These were acquired on 13 May 2009. The interest payable on these securities is €280 million per annum. The shares were purchased at a price of €1.00 per share and thus the state owns 3.5 billion shares. The 2009 Preference Shares may be purchased or redeemed at the option of AIB, in whole or in part, at a subscription price of €1.25 per share, after a step-up of 25% was applied in 2014 as per the conditions of the instrument.
As the Deputy will be aware, work is continuing between my Department, AIB and its regulator in relation to potential capital restructuring options and sequencing in order to maximise the return of cash to the State from our AIB investments over time. These decisions include considerations around the potential restructuring of the Preference Shares, which it is possible for the bank to redeem or, alternatively, convert to ordinary shares with my prior agreement.
