State due for payout from IBRC surplus after liquidation

Payout also likely for former Anglo junior bondholders with investment of €270m

Liquidator Kieran Wallace of KPMG will announce  a significant surplus has resulted from the liquidation, after funds are repaid to secured creditors. Photograph: Brenda Fitzsimons

Liquidator Kieran Wallace of KPMG will announce a significant surplus has resulted from the liquidation, after funds are repaid to secured creditors. Photograph: Brenda Fitzsimons

 

The State and other unsecured creditors are set to get an interim payout from the liquidation of IBRC before the end of this year.

The joint liquidators , Kieran Wallace and Éamonn Richardson of KPMG, will announce on Friday that a significant surplus has resulted from the liquidation, after funds are repaid to secured creditors.

Despite having to await the outcome of legal actions, the joint liquidators will say they are in a position to make an interim payment to unsecured creditors, including the State, trade creditors, credit unions and others, by the fourth quarter of 2015.

The liquidators have already repaid the secured creditors, mainly Nama, from the proceeds of the sale of assets with a book value of almost €22 billion.

Depositors

It is understood between €1.6 billion and €2 billion is likely to be left as a surplus after this. The State is owed more than €1.1 billion, mainly resulting from payouts to guaranteed depositors.

It is the largest of the unsecured creditors, who are owed a total of around €1.5billion- €1.6 billion.

Given the size of the surplus, a payout is likely at some stage to former Anglo junior bondholders who have an investment of €270 million. These bondholders held out against a previous buyout offer from the State.

This will prove controversial, though the bondholders are unlikely to be paid for some years as the liquidators must hold cash as a reserve as court actions against IBRC continue, including a landmark case taken by the family of Seán Quinn .

The payout to unsecured creditors was not envisaged at the time of IBRC’s liquidation, but the sale of assets has raised much more than anticipated.

It is not clear what size of interim payout the liquidators plan, but most of it will go to the State.

Asset sale The completion of the asset sale is the final chapter in the story of Anglo Irish Bank and Irish Nationwide, which cost the State a combined sum of around €35 billion.

Minister for Finance Michael Noonan gave an advance welcome to the liquidators’s report and also said he had instructed the National Treasury Management Agency (NTMA) to proceed with the early repayment of the final €5.5 billion of IMF loans that the Government secured agreement to repay.

He was speaking at the Euromoney conference in the Westin Hotel in Dublin.

The remaining €1.6 billion in proceeds from the sale of the Bank of Ireland preference shares and the €400 million from the repayment of the Permanent TSB contingent convertible capital notes instrument, will be used to part-finance this repayment.

This early repayment of the majority of IMF loans will deliver savings of over €1.5 billion over the lifetime of the loans, the minister said.