AIB’S SHARE price bobbed around violently yesterday as shocked shareholders came to terms with the fact that they face being wiped out by the state’s recapitalisation of the institution. It closed down 8 per cent at 51 cent, having gone as low as 37 cent.
One stockbroker reported yesterday getting a call from a client who wanted him to sell his AIB stock at whatever price he could get. “He just wanted out . . . I managed to get him 50 cent for the stock,” the broker said.
AIB plans to raise €5.4 billion in fresh capital from the sale of new shares in the bank to meet new capital adequacy ratios set by the Financial Regulator. The Government is expected to chip in up to €3 billion of this and it could end up with an “econmic interest” 92 or 93 per cent in the bank.
AIB will continue to be quoted on the stock market. This is not without precedence. Royal Bank of Scotland in Britain went through a similar restructuring last year. “The mechanics of implementation will be subject to discussion with relevant listing authorities,” AIB said yesterday.
Ironically, all of this will be subject to the consent of AIB shareholders – not that they have a choice.