IL&P shareholders on verge of forcing historic vote

SHAREHOLDERS in Irish Life & Permanent (IL&P) seem to be on the verge of forcing an historic vote on the group’s recapitalisation plans, but could run out of time before succeeding in their aim.

A group of disgruntled institutional investors — led by investment fund, Scotchstone Capital — are fighting the plans, which include the disposal of Irish Life. At IL&P’s volatile annual general meeting, last month, its new chairman, Alan Cook admitted that up to €2.5 billion of the group’s €4bn post-stress test capital requirements will have to come from Government.

Mr Cook also said that IL&P would take “all reasonable steps” to raise as much of its funding target by its own means, as possible, adding that the stress test results seemed “profoundly unfair” on IL&P shareholders in particular.

To date, no shareholders have forced an Irish company into holding an unplanned extraordinary general meeting (EGM). This group of investors needs the support of at least 5% of IL&P’s shareholder base, but claims it already has 14%. IL&P’s management is negotiating with its corporate lawyers over whether or not it now needs to call an EGM for shareholders to vote on the funding plan.

A spokesperson for IL&P said, yesterday, that the group’s management is assessing whether or not the 5% approval rate has been reached and that if so, management would respond within the recommended 21-day deadline, but would “have to satisfy themselves that the resolutions being sought are both lawful and practical”.

It is unlikely that any EGM would be held until sometime in August, while the recapitalisation exercise is targeted for completion before the end of July.

The shareholder group is looking for an extension of that July deadline and the appointment of an investment bank to review the process.

IL&P is hoping to raise about €1.5bn from the sale of Irish Life, money that will go straight into propping up the group’s loss-making banking arm, Permanent TSB.