AIB - Capital Raising Update
(Thomson Reuters ONE) -
For Immediate Release 1st July 2011
AIB - Capital Raising Update
Allied Irish Banks, p.l.c. ("AIB") [NYSE:AIB] announces that, further to its
announcement of 23 June 2011, it has concluded discussions with the Government
and has agreed the final terms of its capital raising transaction, pursuant to
which it proposes to raise ?5 billion of equity share capital from the National
Pensions Reserve Fund Commission (the "NPRFC") and up to ?1.6 billion by the
issue of contingent capital notes to the Minister for Finance (the "Minister")
(together, the "Capital Raising").
On 26 May 2011, AIB announced that it had signed an agreement with, amongst
others, the Minister to acquire Educational Building Society ("EBS"), subject to
receipt of all regulatory approvals required. As announced by AIB earlier
today, completion of the acquisition of EBS by AIB has now taken place. The
Minister has stated that the merger of AIB and EBS will form one of the two
pillars of Irish banking.
On 31 March 2011, the Central Bank of Ireland prescribed a minimum capital
target for certain Irish credit institutions of 10.5% Core Tier 1 Capital under
a base scenario and 6% Core Tier 1 Capital under a given stress scenario, plus
allowing for an additional protective buffer. As a result, AIB is required to
increase its Core Tier 1 Capital by c.?13.3 billion (of which c.?1.4 billion may
be in the form of contingent capital), and EBS is required to increase its Core
Tier 1 Capital by c.?1.5 billion (of which c.?0.2 billion may be in the form of
contingent capital). These capital increases are to be completed by 31 July
2011. Following completion of the EBS merger earlier today, it is expected that
AIB will be required to raise a total of c.?14.8 billion of Core Tier 1 Capital,
of which c.?1.6 billion may be in the form of contingent capital (the "PCAR
Requirement").
The Capital Raising will comprise an equity placing (the "Placing") of ordinary
share capital of ?5 billion to the NPRFC and an issue of up to ?1.6 billion of
contingent capital convertible notes (the "Contingent Capital Notes Issue") to
the Minister. The Placing will comprise an issue of new Ordinary Shares for cash
at a price of ?0.01 per share. The Contingent Capital Notes Issue will comprise
an issue of contingent capital notes (the "Contingent Capital Notes") for cash.
The Contingent Capital Notes will be subordinated tier 2 capital instruments
with a five year and one day maturity denominated in units of ?1,000 (with a
minimum denomination of ?100,000), issued at par with an aggregate principal
amount of up to ?1.6 billion. In certain circumstances, including if AIB's Core
Tier 1 Capital ratio falls, or is likely in the opinion of the Central Bank to
fall, below 8.25%, the Contingent Capital Notes will convert immediately and
mandatorily in their entirety into ordinary shares at a conversion price of
?0.01 per Ordinary Share. The Contingent Capital Notes carry a fixed annual
mandatory interest rate of 10% of the principal amount, but this may be
increased by the Minister up to a maximum amount of 18% per annum if the
Contingent Capital Notes are to be sold by the Minister.
It has been indicated to AIB by the Minister that it is his intention that any
portion of the PCAR Requirement that has not been satisfied by the Capital
Raising, other capital generating exercises undertaken by AIB and EBS and any
further burden-sharing with the Group's subordinated debt holders, will be
satisfied by way of a capital contribution to be made by the State to AIB (the
"Capital Contribution") once the Minister is satisfied that an appropriate level
of burden-sharing has been achieved with the Group's subordinated debt holders.
It is expected that the Capital Contribution would be given to AIB by the State
for no consideration and accordingly no new Ordinary Shares will be issued by
AIB to the State in return for the Capital Contribution.
The proceeds of the Placing, the Contingent Capital Notes Issue and the Capital
Contribution will be used to fund the day-to-day operations of the Group.
By strengthening the Group's capital position, the Capital Raising and the
Capital Contribution should facilitate the objective of providing for a
sustainable future as a systemically important pillar bank, continuing to
support customers, and contributing to economic recovery. AIB's continued
listing on the Enterprise Securities Market of the Irish Stock Exchange enables
Shareholders to continue to trade their shares, ensures that AIB remains subject
to market oversight, disclosure and reporting obligations and facilitates AIB's
wish to maintain investor relationships and market analyst coverage.
The Placing and the Contingent Capital Notes Issue will have a significant
positive impact on the Group's capital ratios, further details of which are set
out in the circular referred to below to be dispatched to Shareholders shortly
in connection with the Capital Raising. The Capital Contribution will also have
a positive impact on the Group's capital ratios.
The Capital Raising constitutes a "related party transaction" for AIB for the
purposes of the ESM Rules (being a transaction between AIB, the Minister who,
through the NPRFC, currently holds c.93.1% of the total issued ordinary share
capital of AIB, and the NPRFC). In those circumstances, the ESM Rules oblige
the Directors (other than those connected with the related party), in
recommending the transaction to Ordinary Shareholders, to form the view that the
terms of the transaction are fair and reasonable insofar as Shareholders are
concerned and to describe their view in that specific wording. Accordingly, the
Board, having consulted with AIB's ESM adviser, Morgan Stanley & Co.
International plc, considers the Placing and the Contingent Capital Notes Issue
to be fair and reasonable insofar as Ordinary Shareholders are concerned. In
reaching its decision, the Board has taken into account the absence of any
viable alternatives to raise the necessary capital to meet the PCAR Requirement
and also the fact that the sole provider of the required capital, the State, is
willing to provide the requisite capital on the terms summarised above only.
To avoid any potential conflict of interest, the three Directors appointed by
the Government, Mr Declan Collier, Mr Dick Spring and Dr Michael Somers, have
not taken part in the Board's decision to proceed with the Placing and the
Contingent Capital Notes Issue.
AIB's Board of Directors acknowledges the continued support of the Minister and
the Irish State.
Circular and Shareholder Meeting
To implement the Capital Raising, AIB will dispatch a circular to Shareholders
shortly, including a notice to convene an EGM to be held at 10.00 a.m. on
Tuesday, 26 July 2011, at Bankcentre, Ballsbridge, Dublin 4, to consider, and if
thought fit, pass necessary shareholder resolutions.
AIB's Annual General Meeting will also be held on Tuesday, 26 July 2011,
commencing at 12 noon (or 20 minutes after the conclusion of the EGM, if later)
at Bankcentre, Ballsbridge, Dublin 4. A separate circular will be dispatched to
Shareholders shortly, including a notice to convene the AGM, to consider, and if
thought fit, pass the shareholder resolutions to be proposed at the AGM.
The Government Shareholding Following the Capital Raising
Pursuant to the Placing, AIB will issue 500,000,000,000 new Ordinary Shares to
the NPRFC. Upon completion of the Placing, and following a further allotment of
new Ordinary Shares to the NPRFC in lieu of part of the 2011 annual cash
dividend on the 2009 Preference Shares that was deferred on 13 May 2011, the
NPRFC will hold c.99.8% of the enlarged total issued ordinary share capital of
AIB. AIB will at that time have 513,491,220,350 Ordinary Shares in issue
(excluding 35,680,114 treasury shares), however, it is possible that the total
number of Ordinary Shares in issue may decrease by 36,212,608 if a 5% increment,
that is prescribed by the terms of the 2009 Preference Shares due to the
deferral of part of the 2011 annual dividend, is waived.
Frequently Asked Questions
A number of Shareholder FAQs in relation to the Capital Raising will be included
shortly on AIB's website: www.aibgroup.com/investorrelations
- ENDS -
For further information, please contact:
Alan Kelly
Director of Corporate Affairs & Marketing
AIB Group
Bankcentre
Dublin 4
Tel: +353 1 6412162
Ronan Sheridan
Group Press Officer
AIB Group
Bankcentre
Ballsbridge
Dublin 4.
Tel: + 353 1 6414651
IMPORTANT INFORMATION
This is not a prospectus, circular or other equivalent document. You should not
rely on any information as set out in this announcement. This announcement does
not constitute an offer or invitation to purchase, otherwise acquire, subscribe
for, sell, otherwise dispose of or issue, or any solicitation of any offer to
sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for,
any security. There shall be no offer to the public in any jurisdiction of any
of the securities forming part of the Capital Raising, including, without
limitation in Ireland, the United Kingdom, the United States or elsewhere, nor
shall there be any offer to sell, or the solicitation of an offer to buy, the
securities referred to herein.
The contents of this announcement and the information incorporated herein by
reference should not be construed as legal, business, financial, tax, investment
or other professional advice. This announcement is for your information only and
nothing in this announcement is intended to endorse or recommend a particular
course of action.
Morgan Stanley & Co. International plc (which is authorised and regulated in the
United Kingdom by the Financial Services Authority ("Morgan Stanley") acts as
ESM adviser to AIB. AIB Corporate Finance Limited ("AIB Corporate Finance")
(which is regulated in Ireland by the Central Bank of Ireland) and Morgan
Stanley act for AIB and no one else in connection with the Capital Raising and
will not regard any other person (whether or not a recipient of this
announcement) as their respective client in relation to the Capital Raising and
will not be responsible to anyone other than AIB for providing the protections
afforded to their respective clients or for providing advice in relation to the
Capital Raising or any other matter referred to in this announcement.
Morgan Stanley makes no representation, express or implied, for the contents of
this announcement, including its accuracy, completeness or verification or for
any other statement made or purported to be made by AIB, or on AIB's behalf, or
by it, or on its behalf and nothing in this announcement is or shall be relied
upon as a promise or representation in this respect, whether as to the past or
future. Morgan Stanley accepts no responsibility for the contents of this
announcement and disclaims to the fullest extent permitted by law all and any
liability, whether arising in tort, contract or otherwise, which it might
otherwise have in respect of this announcement or any such statement.
None of the Minister for Finance, the Department of Finance, the Irish
Government, the National Treasury Management Agency, the National Pensions
Reserve Fund Commission or any person controlled by or controlling any such
person, or any entity or agency of or related to the Irish State, or any
director, officer, official, employee or adviser of any such person (each such
person, a "Relevant Person") accepts any responsibility for the contents of this
announcement, or makes any representation or warranty as to the accuracy,
completeness or fairness of any information contained in this announcement. Each
Relevant Person expressly disclaims any liability whatsoever for any loss
howsoever arising from, or in reliance upon, the whole or any part of this
announcement or any document referred to in this announcement or any supplement
or amendment thereto (each a "Transaction Document"). No Relevant Person has
authorised or will authorise the contents of any Transaction Document, or has
recommended or endorsed any course of action contemplated by any Transaction
Document.
AIB Corporate Finance makes no representation, express or implied, for the
contents of this announcement, including the accuracy, completeness or
verification of any information contained therein, or for any other statement
made or purported to be made by AIB, or on AIB's behalf, or by them, or on their
behalf and nothing in this announcement is or shall be relied upon as a promise
or representation in this respect, whether as to the past or future. AIB
Corporate Finance accepts no responsibility for the contents of this
announcement and disclaims to the fullest extent permitted by law all and any
liability, whether arising in tort, contract or otherwise, which it might
otherwise have in respect of this announcement or any such statement.
The release, publication or distribution, in whole or in part, directly or
indirectly, of this announcement in jurisdictions other than Ireland and the
United Kingdom may be restricted by law and therefore persons into whose
possession this announcement comes should inform themselves about, and observe,
such restrictions. Any failure to comply with the restrictions may constitute a
violation of the securities laws of any such jurisdiction.
This announcement is not, and does not constitute, an invitation or offer to
sell, or the solicitation of an offer to buy, the securities discussed herein in
any jurisdiction, including, without limitation, the United States. The
securities discussed herein have not been and will not be registered under the
US Securities Act of 1933 (the "US Securities Act") or under any securities laws
of any state or other jurisdiction of the United States and may not be offered
or sold directly or indirectly, within the United States or to, or for the
account or benefit of, US persons. There will be no public offer of the
securities discussed herein in the United States.
This announcement contains or incorporates by reference "forward-looking
statements", within the meaning of Section 27A of the US Securities Act and
Section 21E of the US Securities Exchange Act of 1934, regarding the belief or
current expectations of AIB, AIB's Directors and other members of its senior
management about AIB's business and the transactions described in this
announcement, including statements relating to possible future write downs or
impairments. Generally, words such as "may", "could", "will", "expect",
"intend", "estimate", "anticipate", "believe", "plan", "seek", "continue",
"should", "assume", "target", "goal", "would" or similar expressions identify
forward-looking statements. All statements other than statements of historical
fact are, or may be deemed to be, forward-looking statements.
These forward-looking statements are not guarantees of future performance.
Rather, they are based on current views and assumptions and involve known and
unknown risks, uncertainties and other factors, many of which are outside the
control of AIB and are difficult to predict, that may cause actual results to
differ materially from any future results or developments expressed or implied
from the forward-looking statements.
No statement in this announcement or any document incorporated by reference
herein is intended to constitute a profit forecast or profit estimate for any
period. The forward-looking statements speak only as of the date of this
announcement. AIB does not have any obligation and expressly disclaims any
obligation or undertaking, to update or revise publicly any forward-looking
statement, whether as a result of new information, future events or otherwise.
AIB expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statement contained in this
announcement or any change in events, conditions or circumstances on which any
such statement is based.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Allied Irish Banks, p.l.c. via Thomson Reuters ONE
[HUG#1527912]
Unternehmensinformation / Kurzprofil:
Datum: 01.07.2011 - 16:23 Uhr
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News-ID 56066
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