The Minister for Finance has pushed the button on the sale of a 25% stake in AIB which will kick start a process that will eventually see the shares listed on the Dublin and London exchanges.
Bernard Byrne, CEO of AIB said the process should take up to four weeks. The bank's senior executives will embark on an investor roadshow to sell the bank's story over that time.
"Today is a landmark day. The Government decision confirms that the bank is ready to move into private ownership. The proceeds will enable the state to continue to recover its investment. It's a four to five week process which is about telling the investors about the bank and the Government determining a price range for the institution," the AIB CEO said.
Mr Byrne said the bank's executives had already spent a lot of time testing investor appetite. "Investors can see the bank has been performing positively with a combination of a strong Irish economy and a growing euro zone economy. There is a significant investor appetite."
The AIB CEO said he was not concerned about the increasingly uncertain outcome of the UK general election. "Our issue is to focus on the things we can manage and control. We can manage and control the bank. I never get too concerned about the commentary around markets. The UK market will value bank stocks based on the market they operate in."
Mr Byrne said the 25% stake was likely to be sold to a wide variety of institutions, most of which would be 'long only' funds."They take a long term perspective. They'd be interested in dividend flow as a proxy for the Irish economy. I don't think it'll be a single holding," he said.
He would not be drawn on the likely price range for the initial public offering. "We have no view on share pricing. The marketing process will allow the Government to determine where the range sits. The only valuation is the €11.3 billion by the NTMA in February. That's the last formal valuation for the institution."
Bernard Byrne said he believed the state would be in "touching distance" of recovering the €21 billion it invested in the bank after the crash. "If you take the funds the state has received, €6.8 billion, and the valuation of €11.3 billion, that would put you in a range of close to €18 billion in value. With future dividends, that would put you in touching distance of returning all the funds," he concluded.
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