AN INVESTMENT VEHICLE led by the Russian billionaire owner of Chelsea FC, Roman Abramovich (pictured), has threatened to sue the Irish government over its plans to offload some of the bill for the banking bailout to bondholders in one of the affected institutions.
In Brian Lenihan’s statement on the final costs of the banking bailout yesterday, the finance minister said that holders of such subordinated debt in Anglo Irish Bank and Irish Nationwide Building Society (INBS) would be expected to make a “significant contribution” towards the cost of managing those institutions.
But now Abramovich’s company Millhouse, which holds subordinated (“risky”) bonds in INBS, says it will pursue “all possible legal means” to defend its position if the government decides not to honour the full amount of the bonds when they mature.
Arguing that making subordinated bond holders cover some of the bailout costs was unfair – and possibly illegal, according to Reuters – the company said the ‘tier 2 debt’ it held would only save 2.3% of the total bailout cost of the company.
The total cost of bailing out INBS will reach €5.4bn, according to Lenihan’s statement.
Millhouse’s portfolio is quite varied; it also has a $400m (€290m) investment in an international mining company.
If the government seeks to defend itself against Abramovich, it should probably try to get the money together soon: Abramovich is considered by Forbes to be the world’s 50th richest man, with a net worth of $11.2bn (€8.14bn).