State selling AIB shares ‘on the cheap’, says Howlin

Tánaiste confirms sale will go ahead with share value established today

Labour leader Brendan Howlin: claimed the Government  “is giving away the people’s investment at less than what it is worth. Photograph: Gareth Chaney Collins

Labour leader Brendan Howlin: claimed the Government “is giving away the people’s investment at less than what it is worth. Photograph: Gareth Chaney Collins

 

The Government was accused of selling its AIB shares “on the cheap for no great benefit” with a potential loss in sale value of €500 million.

Labour leader Brendan Howlin who opposes the sale of 25 per cent of the State’s 99.9 per cent shareholding in the bank, claimed the Government is selling the shares at a discount and “is giving away the people’s investment at less than what it is worth, simply to ensure a good market reaction and good headlines”.

The former minister for public expenditure was speaking in the Dáil following media reports of a reduction in the possible share price, which will be determined Thursday evening.

Mr Howlin said originally the share price was to peak at €4.90 “and now we understand after two alterations it is to be €4.30 peak per share, which is 40 per cent less than originally expected”.

The Wexford TD said “this lower valuation means the State is selling AIB at a discount, potentially leaving €500 million on the table”.

Final settlement

Tánaiste Frances Fitzgerald confirmed the sale would go ahead on Friday. She said the “book building process which allows shares to retail and institutional investors, will continue until Thursday June 22nd (today) at which point pricing will be decided and trading will comment on Friday, June 23rd, tomorrow”.

Ms Fitzgerald said a final settlement where funds received would be deposited with the NTMA (National Treasury Management Agency) which holds the shares, will occur two working days later on June 27th.

“The final listing price will be obvious as will whatever the proceeds for the State will be.”

The Tánaiste stressed that the sale would be treated as a financial transaction and not counted as general Government revenue and would therefore not result in a beneficial impact on the general Government balance.

Ms Fitzgerald said “the Government’s policy has been consistent that the proceeds should be directed towards debt reduction to reduce the cost of debt servicing in future years”.