The Government has been granted a High Court order for the recapitalisation of Irish Life & Permanent, effectively nationalising the group with an injection of €2.7 billion of state funds.
Shareholders in IL&P last week voted against Government plans to take a stake of more than 99% in the group. This meant the Government had to go to the High Court to recapitalise the group by the end of this month as agreed under an EU-IMF bail-out.
'It was clear that IL&P was not in a position to raise sufficient capital itself, and therefore ILP is reliant upon the State to provide the necessary capital in order to comply with the Central Bank requirements,' Finance Minister Michael Noonan said.
He said there was 'considerable shareholder confusion' about the problems with IL&P's business, including a 'lack of appreciation' of how over-reliant it was on emergency funding from the ECB and the Central Bank.
He added that the Government had not been approached with credible proposals from any potential investors in IL&P and had not received any concrete proposals. Mr Noonan added that the State had not been introduced to 'the unnamed potential investors which certain shareholders have stated are willing to invest in IL&P'.
The Minister said the Government remained open to engage with parties interested in investing in the group, but this week's deadline meant it had no option but to go to court today.
In a statement, IL&P said its board believed the capital increase by July 31 was critical for the group's continuing banking activities. It will now be seeking to cancel the listing of its shares on Dublin's main market and applying for a listing on the junior ESM market.
Today's order also direct's IL&P not to go ahead with resolutions passed at last week's EGM relating to the appointment of new financial and legal advisors and a request to extend the July 31 deadline.
