EBS gets further €525m bailout

THE Government has injected a further €525 million to bail out EBS Building Society, effectively bringing it under state control.

EBS gets further €525m bailout

The funding is to be via special investment shares issued to Minister for Finance Brian Lenihan, which can be converted into ordinary shares if the EBS adopts a company format.

Mr Lenihan takes control of the firm including the appointment of the board and passing of members’ resolutions.

Back in March, Mr Linehan said that EBS would need €875m to meet new tougher capitalisation targets set by the Financial Regulator.

The Central Bank instructed the institution to raise this money by the end of December.

The Government had previously provided €350m to EBS and the latest capital will bring the building society’s core Tier 1 to 8% by the end of the year. Those funds were in the form of a €100m promissory note, and a €250m injection through the issuance of special investment shares.

“EBS wishes to acknowledge the continued support of the minister and the assistance of the Central Bank in Ireland in these matters and is extremely grateful to the Government for the recapitalisation,” a statement from the society said.

The Government is in talks to sell EBS. Irish Life & Permanent Plc and an investor group led by Cardinal Asset Management and Wilbur Ross’s leveraged buyout firm WL Ross & Co are interested in buying it. The deadline for bids has been extended to January 17.

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