Cash from the sale of Nama and AIB shares goes to the treasury


Taxpayers this week recouped €558 million in the cost of the bank bailout just over a decade ago, using cash from sales of AIB shares and reclaimed funds from Nama.

Nama’s €250 million payment on Tuesday brings the sum recovered from the bad bank to €3.25 billion. A further 250 million euros are to be transferred to the Treasury later this year, after which another 1 billion euros are due. Nama has repaid its initial start-up costs, including debt to banks for loans originally transferred to the agency, and excess cash it now generates over and above its own running costs is being repaid to the state while it is being wound up.

Nama ended the last financial year with EUR 750 million in cash or cash equivalents after generating EUR 670 million from the sale of assets and non-disposable proceeds.

The agency has generated €47 billion in cash over the course of its existence and has just €700 million in loan and real estate assets on its books.

Nama will be wound up over the next three years by selling its residual portfolio, financing residential property development and managing strategic development locations.

Meanwhile, the government continues to reduce taxpayers’ share of the bailed out banks. On Tuesday, Treasury Secretary Paschal Donohoe said the state’s stake in AIB had been cut to 63.5 percent after a sale of around 5 percent of the bank.

The sale of the stake announced by the minister on Monday reduced the government’s stake from 68.5 percent.

The sale of around 133.6 million shares raised EUR 308.4 million at a price of EUR 2.28 per share.

The shares were sold to institutional investors in a placement, a quicker way to sell the government’s stake than placing shares on the market.

Proceeds from the sale will now be paid back to the Treasury by the Ireland Strategic Investment Fund, which holds bank shares on behalf of the State.

The government committed not to sell any further shares in AIB for a period of 90 days after the closing of the placement.

Colin Hunt, CEO of AIB, said the divestment of the 5-part interest was “an important development in the process of returning the government’s investment in the group and a normalization of the share register”.

Taxpayers have now recouped about half of the €20.8 billion cost of bailing out AIB more than a decade ago.

Last week, Mr. Donohoe extended the AIB stock trading plan through January 24 next year. It should end no later than July 10th.

The funds raised from the block sale of shares come in addition to a transaction in May when the government accepted a €91 million buyback offer from AIB to acquire taxpayer-owned shares. As the bank’s largest shareholder, the state was the largest financial beneficiary of this transaction, in which the bank used part of its own profits to redeem shares. The government is also in line for the lion’s share of a proposed €122 million cash dividend this year.

The government’s stake in the Bank of Ireland was also reduced from 13.9 percent to just under 3 percent last year, raising well over 530 million euros. In contrast to AIB’s block sale, Bank of Ireland’s stake was reduced through ongoing but smaller stock sales through the stock exchange. Cash from the sale of Nama and AIB shares goes to the treasury

Fry Electronics Team

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