Plans by Permanent TSB to raise €400m challenged

A High Court challenge has been brought to plans by Permanent TSB aimed at raising €400 million through a share placing to institutional investors ahead of listings on the London and Dublin stock exchanges.

PTSB, which is 99.2 per cent owned by the State, announced earlier this week plans to raise the €400 million as part of the overall plan to return PTSB to private ownership.

The bank also announced a scheme aimed at raising an additional €125 million in capital from the share sale by issuing a form of corporate debt that would convert into bank shares if the bank ran into financial difficulties in future. It will seek a primary listing on the Irish Stock Exchange and a secondary listing in London.

Arising out of the proposals, three shareholders of the company, Gerard Dowling, Padraig McManus, and Piotr Skoczylas, have initiated actions seeking various injunctions including one preventing the Irish Stock Exchange allowing any new shares issued as a result of the €400 million share issue in the company.

They seek an injunction restraining the company, until cetrain steps are taken, issuing new ordinary shares to raise €400 million for the purpose of repaying the Minister for Finance in respect of a contingent bond due for redemption in July 2016.

They also want the High Court to restrain the company completing the sales of non core assets, which it announced last month, until the sales are approved by a General meeting of PTSB Group Holdings. These non-core assets include €5 billion of the group’s Capital Home Loans mortgage book and €1.5 billion of a portfolio of loans connected to commercial properties in Ireland.

The proceedings are against Permanent TSB Group Holdings plc, as well as all members of the company's board including chief executive Jeremy Masding, and the Irish Stock Exchange.

Mr Justice Paul Gilligan granted the shareholders' ex parte application for permission to serve short notice of their proceedings against the respondents and returned the matter to next week.

Mr Skoczylas is a former director of the group and he and the other shareholders have been battling the decision by the Minister, Michael Noonan, to take over 99 per cent of the business in 2011 and also challenged the Minister's direction to inject €4 billion into the former Irish Life and Permanent.