PE firms eying stake want Irish assurance
Source: Agencies |
August 23, 2010, Monday
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Print Edition
Print Edition
PRIVATE equity groups looking to take a majority stake in Ireland's EBS are to seek assurances from the Irish government that it will help bear any future exceptional losses at the building society, The Sunday Times reported.
The state-run group received bids from PE groups JC Flowers, Doughty Hanson and Cardinal Asset Management and bancassurer Irish Life & Permanent last week as it seeks to raise its capital base following a property market collapse.
Citing sources, the newspaper said the private equity firms were all seeking downside risk protection clauses as part of any deal.
JC Flowers and Doughty Hanson declined to comment on the report. No one from EBS or Irish Life & Permanent was immediately available to comment.
EBS has said it needs to find 775 million euros (US$992.8 million) by the end of the year and could achieve this through a combination of private and public sources.
The newspaper said the private equity firms will seek to buy between 60 percent and 70 percent of EBS and could invest up to 500 million euros in the bank. It said Irish Life & Permanent is set to offer up to a 50 percent stake.
The bancassurer declined to comment on the report.
The Irish government has already injected 100 million euros into the building society and has promised a further 250 million euros of the overall amount through a promissory note, which spreads actual payments out over up to 15 years.
Dublin has said it would provide the rest of the money if EBS is unable to source the capital elsewhere.
Ireland's building societies, owned by their customers and conservative, lent aggressively and have been hit by the property sector collapse.
The state-run group received bids from PE groups JC Flowers, Doughty Hanson and Cardinal Asset Management and bancassurer Irish Life & Permanent last week as it seeks to raise its capital base following a property market collapse.
Citing sources, the newspaper said the private equity firms were all seeking downside risk protection clauses as part of any deal.
JC Flowers and Doughty Hanson declined to comment on the report. No one from EBS or Irish Life & Permanent was immediately available to comment.
EBS has said it needs to find 775 million euros (US$992.8 million) by the end of the year and could achieve this through a combination of private and public sources.
The newspaper said the private equity firms will seek to buy between 60 percent and 70 percent of EBS and could invest up to 500 million euros in the bank. It said Irish Life & Permanent is set to offer up to a 50 percent stake.
The bancassurer declined to comment on the report.
The Irish government has already injected 100 million euros into the building society and has promised a further 250 million euros of the overall amount through a promissory note, which spreads actual payments out over up to 15 years.
Dublin has said it would provide the rest of the money if EBS is unable to source the capital elsewhere.
Ireland's building societies, owned by their customers and conservative, lent aggressively and have been hit by the property sector collapse.
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