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Anglo and Irish Nationwide ordered to pursue merger plan

Anglo says Michael Noonan has ordered it and Irish Nationwide to begin action on a joint plan for “high level restructuring”.

ANGLO IRISH BANK has confirmed that it is effectively to merge with Irish Nationwide Building Society, on the orders of finance minister Michael Noonan.

In a statement released to the London Stock Exchange this morning – where Anglo is still listed, despite its shares having been suspended since late 2008 – Anglo said Noonan had ordered Anglo to implement “high level plans” to combine with Irish Nationwide.

The requirement to come up with a merger document had been imposed under the terms of the Credit Institutions (Stabilisation) Act 2010, to which Noonan had been opposed and voted against while in opposition.

The orders also followed High Court action taken by the previous finance minister, Brian Lenihan, in January under the terms of the Act which directed Anglo to formulate a detailed plan for the merger with INBS.

The latest order, to begin implementing those steps, has been issued subject to any variations on the plan directed by the European Commission.

Both institutions were ordered to transfer their deposits to other Irish institutions in February, and so both institutions are now engaged simply in managing their outstanding loan books before being wound down.

Anglo had €6.255bn in outstanding bond liabilities as of mid-February, while Irish Nationwide had outstanding bonds worth €766m. If the institutions were to merge, only just under €3bn of Anglo’s liabilities would be guaranteed.

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