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Nine News: David Murphy, Business Correspondent, reports that the shareholding will be in lieu of a dividend owed to the Government
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Six One News: David Murphy, Business Editor, explains the details of the move, which will happen on Monday
The State is taking 15.7% stake in Bank of Ireland on Monday.
The shareholding is in lieu of a dividend owed to the Government by the bank.
Bank of Ireland received preference shares worth €3.5bn last year and was due to pay the Government €250m tomorrow.
The European Commission blocked banks in receipt of state aid from making cash payments.
This forced the bank to give the Government shares instead of cash.
The new shares are addition to warrants entitle the State to a 25% shareholding in Bank of Ireland in four years time.
The development will mean ordinary shareholders will be diluted by the Government's new shareholding.
The bank is currently valued at €1.2bn.
