Irish Life & Permanent succumbs to state control

THE Government will own more than 99% of Irish Life & Permanent Plc, the country’s third-biggest lender, after providing a €3.4 billion bailout.

The company will delist its shares from the London and Irish stock exchanges in August and will transfer them to the Irish Stock Exchange’s junior Enterprise Securities Market, the lender said in a statement yesterday.

The decision makes Irish Life the fifth of the country’s six biggest lenders to succumb to state control after racking up record losses in the collapse of the real estate market.

Finance Minister Michael Noonan said in March he expected the Government would take control of the lender after the Central Bank ordered it to raise €4bn after a third round of stress tests.

“Given the ongoing systemic problems in the Irish banking system and the amount required compared to the current market capitalisation of the company, the directors do not believe that other sources of capital are currently available to the group,” Irish Life said in a statement.

The lender has a market value of about €16.3m, from a peak of more than €6bn in February 2007.

The Government will buy €3.4bn of shares, €400m of contingent convertible notes and allow Irish Life to raise a further €200m “from internal group resources,” Irish Life said yesterday.