Allied Irish hires UBS to help share sale-source
DUBLIN, Sept 16 | Thu Sep 16, 2010 5:17pm BST
DUBLIN, Sept 16 (Reuters) - Allied Irish Banks (ALBK.I) has hired UBS (UBSN.VX) to advise on a share sale to raise up to 3 billion euros ($3.9 billion) in fresh capital ahead of an end-of-year deadline, a source familiar with the situation told Reuters on Thursday.
Ireland's second-largest bank needs to raise 7.4 billion euros by the end of the year to meet a 7 percent core tier one capital threshold set by the country's financial regulator.
No one from Allied Irish or UBS was immediately available to comment.
The lender raised a third of the 7.4 billion euros last week through the sale of its Polish businesses to Spain's Santander (SAN.MC) and analysts expect it to generate around 2 billion euros from selling its UK operations and a 22 percent stake in U.S. bank M&T (MT.N).
An announcement on the sale of the remaining overseas units is expected in the next few weeks.
Ireland's government has said it will increase its stake in Allied Irish from a current 19 percent shareholding if the bank fails to come up with private capital by the end of the year.
Even with the sell-off of its assets, AIB still faces the threat of majority state ownership after its balance sheet was shattered by its wide exposure to Ireland's property crash.
Allied Irish said in early August that it expected to tap the market with a placing and a rights issue in the fourth quarter.
Allied Irish is playing catch-up with rival Bank of Ireland (BKIR.I), which has already replenished its capital to the tune of 3 billion euros via a placing, a rights issue, a debt for equity swap and the government converting part of its preference shares to ordinary equity. (Reporting by Carmel Crimmins; Editing by David Holmes)
http://uk.reuters.com/article/idUKLDE68F1VT20100916