All of the broadsheets note the likely formal state takeover of AIB this week – just what the taxpayer didn’t want for Christmas.
“It is likely that nearly all of the €3.5 billion the government injected via preference shares into AIB in February 2009 will be converted into ordinary shares,” The Sunday Tribune notes. “That’s likely to push the taxpayers’ stake in AIB from the current level of 18% to well above 90%. Some market sources have suggested the Department of Finance and NTMA might fully nationalise the bank in one step.
“The state is already on the hook for the billions of euro more that AIB needs to find by the end of February to meet tough new capital levels set by the Central Bank in the wake of the bailout agreement between Ireland and the EU and the IMF.”
Separately, The Sunday Business Post concentrates on the mechanics of the takeover and the likely delisting of the bank from the stock exchange. It is also possible the Dáil may have to be recalled if President Mary McAleese refers the move to the Supreme Court for approval – a possibility if the AIB takeover is completed under the aegis of last week’s controversial Credit Institutions (Stabilisation) banking bill, which the president is to consider on Tuesday.
Regardless, there is no escape for the hapless taxpayer.
“AIB needs almost €10 billion of new capital by the end of February. While some €2.5 billion to €3 billion of this may come from buying back subordinate bonds at a deep discount, and further cash may come from more disposals, the bulk of the recapitalisation will come from the taxpayer,” write Cliff Taylor and Richard Curran.