Bank of Ireland(Gov) - Significant Investment in Bank of IrelandPress Release Source: CNF 8:04, Monday 25 July 2011 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS OR IN OR INTO ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT, INCLUDING THE UNITED STATES Significant Investment in Bank of Ireland (Irish: BIR.IR - news) 25 July 2011 The Governor and Company of the Bank of Ireland ("Bank of Ireland" or "the Bank") welcomes today's announcement by the State of an investment of up to €1.123 billion in the Bank by a group of significant institutional investors and fund managers. As part of the agreement between the State and these investors, the State has agreed to sell c. 4.2 billion units of ordinary stock, representing approximately 14.0 per cent of the Bank's fully diluted ordinary stock*, at a price of 10 cent per unit as follows (i) a sale of c. 2.4 billion units on completion of the rights issue and (ii) a sale of c. 1.8 billion units conditional on the receipt of certain regulatory clearances. In addition, these investors have agreed with the State that, to the extent that the State acquires ordinary stock pursuant to the rights issue underwriting agreement and subject to certain conditions being satisfied, they will purchase up to a further c. 7.0 billion units of ordinary stock from the State, representing approximately 23.3 per cent. of the fully diluted ordinary stock*, at a price of 10 cent per unit. The conditions to this further purchase of 7.0 billion units of ordinary stock include the receipt of certain regulatory consents by these investors and to the extent that the resultant combined stockholdings of these investors exceed 29.9 per cent. of the Bank's then fully diluted ordinary stock, prior approval by independent stockholders. The Bank has been advised that each of these investors will manage their individual stockholdings independently. The Bank has made detailed presentations to and facilitated the due diligence of each of these investors over recent weeks in relation to the Bank's business and strategy and the progress which the Bank has made in repositioning and refocusing itself, including the Bank's pivotal role in helping revitalise the Irish economy.
The Bank has been advised that, should the regulatory and other conditions to all of the above transactions be satisfied and the transactions concluded, the State's maximum stockholding in the Bank would be 32.4 per cent. of the fully diluted ordinary stock* while the State's stockholding will not fall below 15 per cent. The maximum combined stockholding of these investors would be 37.3 per cent. while their minimum combined stockholding would be 14.0 per cent. The precise stockholdings can only be determined upon completion of the rights issue and rump placing and after all regulatory and other approvals necessary for the investment are obtained. The Bank will announce further details of the stockholdings of the State and these investors on completion of the rights issue and rump placing in the coming days.
In order to facilitate this investment, the Bank has given certain commitments to these investors including to assist them obtain the regulatory approvals required for their investment, to conduct business in the ordinary course and to ensure pre-emption. The overall costs of the capital raising, including certain expenses of these investors, will remain within the costs figure previously advised to stockholders. The Bank has also agreed, subject to stockholder approval, to place additional stock up to a maximum of approximately 6 per cent. of the Bank's then fully diluted ordinary stock, with these investors and the State, at 10 cent per unit where their stockholdings following the above transactions are less than 25 per cent. and 15 per cent. respectively. The Bank intends to use the proceeds of any such placings to redeem an equivalent capital value of the 2009 Preference Stock held by the NPRFC.
The Bank stated "The Bank is very pleased to see this major endorsement of the Bank's strategy and the confidence which these investors share with the Bank in the future for the Irish economy. The Bank very much appreciates the opportunity which the Minister has provided to the Bank to seek private capital sources to support its capital raising programme and to enable its existing stockholders to participate in the rights issue component of the capital raising programme."
The latest time for acceptance and payment in full for the rights issue is 11.00am on 26 July 2011.
ENDS
* Based on c. 30.1 billion units of ordinary stock, being the number of units of ordinary stock that will be in issue on completion of the Rights Issue and the issuance of new ordinary stock pursuant to the Debt for Equity Offers and excluding any potential issue of new ordinary stock pursuant to the proposed placing
For further information please contact:
Bank of Ireland
John O'Donovan Andrew Keating
Group Chief Financial Officer Director of Group Finance
+353 (0)766 23 4703 +353 (0)1 637 8141
Tony Joyce
Head of Group Investor Relations
+353 (0)766 23 4729
Dan Loughrey
Head of Group Corporate Communications
+353 (0)766 234770
IBI Corporate Finance
Tom Godfrey
+353 (0)1 637 7800
Mark Spain
+353 (0)1 637 7800
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