Bank of Ireland to complete share restructuring next week

Bank needs final court approval for new holding company and share consolidation

Both Bank of Ireland and AIB said in early February that they aimed to set up holding companies at the top of their corporate structures. Photograph: iStock

Both Bank of Ireland and AIB said in early February that they aimed to set up holding companies at the top of their corporate structures. Photograph: iStock

 

Bank of Ireland’s plans to set up a new parent company and shrink the number of shares in circulation by almost 97 per cent are on track to be completed by the end of next week.

Shareholders in the country’s largest bank by assets will receive on unit of ordinary stock in the new holding company, Bank of Ireland Group Plc, for every 30 they currently hold. The new shares will admitted for trading on the Irish and London stock exchanges on Monday, July 10th, the bank said in on Thursday.

Both Bank of Ireland and AIB said in early February that they aimed to set up holding companies at the top of their corporate structures to comply with European regulations being phased in over the coming years that are designed to minimise taxpayer losses in the event of another crisis.

Equity

These holding companies would issue equity, senior and junior debt in future where investors could face losses if banks run into difficulty. Deposits, however, would continue to be held in the existing operating banks, where they would enjoy greater protection.

Bank of Ireland followed up in March by saying it planned to consolidate its number of outstanding shares, which had ballooned to almost 32.4 billion during the financial crisis as a result of taxpayer bailouts and share sales.

Based on the stock’s current share price of 22.85 cent, the new shares would be worth €6.86.