What Follows from AIB's Nationalisation?

We anticipate Allied Irish Bank's listing on a junior stock exchange and the banks de-facto nationalisation will make trading more liquid

Erin Davis 24 December, 2010 | 9:17AM
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Allied Irish Banks (ALBK) announced Thursday that it will immediately issue EUR 3.7 billion of new equity to the Irish government in order to meet its year-end capital requirements. As a result of this and another transaction, the bank will effectively be nationalised, with the government owning a 92.8% stake.

In conjunction with the capital increase, the deeply troubled bank will cancel its share listing on both the Irish Stock Exchange and the London Stock Exchange. The bank intends to transfer its listing to a junior exchange, the Enterprise Securities Market of the ISE. We anticipate that this, along with the government's overwhelming majority stake in the firm, will make trading significantly more illiquid. The bank has not yet announced its plans for its shares listed on the New York Stock Exchange, which are linked to the Irish shares, but we anticipate that these shares, too, will be delisted.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
AIB Group PLC444.50 GBX2.30

About Author

Erin Davis  is a senior banking analyst for Morningstar.

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