US PE investors may buy stake in Bank of Ireland

US PE Investors May Buy Stake in Bank of Ireland

US PE Investors May Buy Stake in Bank of Ireland

According to media reports Bank of Ireland, which needs to raise €4.2 billion in fresh capital, is in advanced talks with US private equity investors interested to acquire a stake in the lender.

The media reports further added that talks had progressed significantly in the past week and the Irish government has committed to divest a significant portion of its holding after concluding a rights issue next month.

It was reported on Saturday that the bank, in which the government holds 36 percent stake, has agreed to a potential government stock placing of up to 15 percent and sources had said the state had already lined up private investors for the offer instead.

It was understood that the bank has already held discussions with a number of investor groups, including the Texas Pacific Group, run by Ryanair investor and chairman David Bondermann.

The news could not be independently confirmed from Bank of Ireland. No clarifications were issued by Texas Pacific either.

The government has engaged with private investors to attract capital and the potential placing was agreed to take the proceedings further.

After the conclusion of an extensive stress test in March, private investors have grown more confident of Irish banks, media reports suggested.

However, the dependence of Irish banks’ on the European Central Bank for assistance still remains a key issue and any adverse outcome of the ongoing Greek crisis could jeopardise the deal.

Irish banks, unable to enter the interbank lending market due to credibility issues, have already borrowed €54 billion from the country’s central bank and an additional €102 billion from the ECB.

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