THE TRANSFER of €3.5 billion in Government funds to Bank of Ireland under the recapitalisation was completed yesterday. The drawdown took place after the conditions of its agreement with the National Pensions Reserve Fund Commission and the Minister for Finance Brian Lenihan were met, according to a brief Bank of Ireland statement.

Under the terms of the agreement, the Government has provided €3.5 billion in Core Tier 1 capital in return for preference shares with a fixed dividend of 8 per cent payable in cash or ordinary shares.

The preference shares can be repurchased at par up to the fifth anniversary of the issue and at 125 per cent of their face value thereafter.

The deal permits the Minister to appoint 25 per cent of the directors and gives the State 25 per cent of total ordinary voting rights in respect of change of control and board appointments.

Two Government non-executive directors have already been appointed to the board under the Government guarantee scheme: former senior civil servant Tom Considine and former agriculture minister Joe Walsh. The Government is due to appoint two more directors to the board under the terms of the recapitalisation.

The recapitalisation was approved by the bank’s shareholders at an agm in Dublin last week.