AIB share sale
Deputy Howlin criticised the planned sale of a 25% stake in AIB, saying it was happening against the House's wishes and at a lower-than-expected price. The Tánaiste replied that pricing would be finalised through book building and that proceeds would go to debt reduction.
The Government has missed its target and there is no new target. It is a disgrace.
Comment on this
Tomorrow, at least 25% of the shares of AIB will be sold despite the expressed wish of the House that it should not happen. The new Taoiseach has promised to increase capital expenditure but has not indicated from where the money will come. We remain committed to using the proceeds of this sale simply to pay down debt. There has been no discussion in the House on the sale. We rely on the media to tell us what the share price will be. Originally it was to peak at €4.90 per share and now we understand after two alterations it is to be €4.30 peak per share, which is 40 cent less than originally expected. This lower valuation means the State is selling AIB at a discount, potentially leaving €500 million on the table. Will the Tánaiste confirm the Government will sell the AIB shares tomorrow and that it will sell them at a price that, in effect, is giving away the people's investment at less than what it is worth, simply to ensure a good market reaction and good headlines?
Comment on this
As the Deputy has said, the book building process, which allows shares to retail and institutional investors, will continue until Thursday, June 22, at which point pricing will be decided and trading will commence on Friday, 23 June.
Comment on this
Yes, tomorrow. A final settlement, whereby the funds received will be deposited with the NTMA, which holds the shares, will occur two working days later on 27 June. The final listing price will be obvious as will whatever the proceeds for the State will be.
The one-off revenue in divesting the State of its banking assets is treated as a financial transaction and not counted as general Government revenue. Therefore, it will not result in a beneficial impact on the general Government balance. The Government's policy has been consistent that the proceeds should be directed towards debt reduction to reduce the cost of debt servicing in future years.
Comment on this
It is selling on the cheap for no great benefit.