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Irish State sells off 5% of shares in PTSB raising €55.2 million

The Irish State bailed out the bank after the crash in 2008.

THE MINISTER FOR Finance has sold 5% of the State’s shares in Permanent TSB. 

The sale will generate €55.2m for the Exchequer.  

Minister Michael McGrath, speaking today, said that the Irish Government believes that banking is an activity which should be provided “primarily by the private sector”. 

The State holds a majority share in the bank because public taxpayer funds were used to recapitalise the bank after the crash. 

The sale took place in collaboration with the NatWest Group, which also sold off a tranche of PTSB stock. 

The State’s stake in PTSB has fallen from 62.4% to 57.4% as a result. 

NatWest’s shares in the bank have fallen to 13.6%

The shares were disposed of by being placed in an accelerated book building process to investors. 

Book building involves an underwriter determining the price at which the shares must be sold in an Initial Public Offer (IPO).

To achieve price discovery, the underwriter calls for bids from different institutional investors, like fund managers. 

McGrath announced the transaction today – which was somewhat of a surprise. 

He explained that PTSB returned to the Irish stock market in 2015 through an IPO. 

“Since then, it has not been appropriate, nor at times even possible, to further reduce the State’s ownership in the bank. However, a strong economy, careful stewardship and the successful acquisition of a sizeable portion of Ulster Bank’s business have transformed PTSB,” he went on to say. 

McGrath said that there was “significant demand” from a wide number of “local and international investors” that will help to “improve liquidity and interest in the bank”as the Irish state moves towards a wider disposal programme “in the coming years”. 

That means the State plans to further significantly reduce its shares in the bank. 

The Department of Finance was advised by N.M Rothschild & Sons Limited and William Fry LLP on the sale. 

PTSB has welcomed the move by the Irish State. 

Eamonn Crowley, the bank’s Group Chief Executive, said: “This is another important step in normalising the composition of our shareholder base and creating further liquidity in the Bank’s shares.”

“Furthermore it demonstrates market appetite to invest in PTSB following a period of transformational growth and supports our stated ambition to deliver value for the Irish taxpayer,” he added. 

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