Mr Justice Nicholas Kearns yesterday granted the minister’s application, made under the Credit Institutions Stabilisation Act, for the directions order.
The judge said he had received the legal documents at 8am yesterday and noted the overall intention of selling Irish Life was to stabilise and reorganise IL&P. The position of depositors will not be adversely affected by the sale, the court heard.
IL&P had consented to the directions order being made, David Barniville, counsel for the minister, said. It requires IL&P to take steps as soon as practicable, and no later than October, to offer Irish Life Ltd for sale either through an initial public offering or a private sale.
Mr Barniville said IL&P was reliant on support from the state and the European Central Bank. The market needed to be tested to see whether a public offering or private sale of Irish Life was best, he said.
The purpose of the directions order was to see the Irish Life sale occurred in “a quick and orderly manner” and in accordance with specific timelines, counsel said.
The order was also needed to ensure critical early steps in the restructuring plan were carried out quickly without any possible risk it might be alleged an event of default had occurred under IL&P’s senior debt instruments.
A senior Department of Finance official said in an affidavit the minister had considered the direction order was necessary to safeguard the position in circumstances where lawyers in Britain had advised there was a real risk bondholders could argue the preparatory steps required to implement the Irish Life sale may trigger events of default under senior bonds issued by IL&P.
IL&P has about €1bn outstanding under senior bonds guaranteed by the minister under a particular scheme.
IL&P is selling Irish Life and buying back debt but will require about €2.7bn from the state.