The Irish government has confirmed its intention to float their stake in the Allied Irish Bank (AIB) on both the London and Dublin markets.
The Irish state currently owns around 99.9 percent of AIB, and plans to float a quarter of this stake. The bank was nationalised back in 2010, following a $21 million cash injection from the Irish government at the height of the financial crisis.
The IPO is expected to raise €12 billion and would mark one of the biggest flotations the market since Glencore (LON:GLEN) back in 2011, which was valued at £36 billion.
Each investor will be subjected to the terms of a €10,000 minimum investment each and the Irish government will receive the full funds raised.
Finance minister Michael Noonan said:
“The government’s long-held policy is that the state should exit its banking investments in a measured and prudent manner, returning ownership to the private sector over time.”
“The strong progress made by AIB and current market conditions mean that now is the right time to commence this process and proceed with an initial sale of approximately 25 per cent of the state’s shareholding in AIB, as provided for in the programme for a partnership government.”
He added: “Today’s decision is a significant step in the continued normalisation of the state’s involvement in Ireland’s banking system and reaffirms the government’s commitment to recovering its investment in AIB for the benefit of the Irish people.”
Various banking institutions are set to be involved with preparing the IPO. Bank of America Merrill Lynch, Davy and Deutsche Bank are to be joint global co-ordinators.
Ireland’s Department of Finance has also appointed Citigroup (NYSE:C), Goldman Sachs (NYSE:GS), Goodbody Stockbrokers, JP Morgan (NYSE:JPM) and UBS as bookrunners, and co-lead manager Investec.
The flotation of Allied Irish Bank is set to take place later in June.