Permanent TSB shareholders must prep for vote

Permanent TSB shareholders may need to study up to get their heads around a number of quite technical resolutions they'll be asked to vote on at the bank's agm on Wednesday at the Ballsbridge Hotel. The purpose of most of the resolutions is to facilitate the Permo's plan to raise €525 million in new capital, €400 million of which will be used to buy back CoCos – convertible contingent capital notes – from the State. In a recent statement, chairman Alan Cook said the bank believes it will win the "overwhelming support" of its shareholders.

Shareholders will be asked to vote on a share consolidation resolution, which is something of a tidying-up exercise. The bank has some 36.5 billion shares in circulation. If the share consolidation resolution is passed, every 100 ordinary shares will be converted into one new ordinary share, reducing the number of shares in issue to 365 million.

So if you hold 500 ordinary shares, then you will have five new ordinary shares in the future. However, it’s important for shareholders to remember that although they will end up with fewer shares if the resolution is passed, it is expected that the value of each individual share will be greater, so the overall value of their shareholding is expected to remain the same.

The company said recently that this reorganisation would benefit the “marketability” of the shares, which would no longer trade in the “so-called ‘penny stock’ range”.

Of course, Minister for Finance Michael Noonan holds a 99.2 per cent shareholding in Permanent TSB on behalf of the State, so if he casts his vote, it will be the deciding one.