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Ireland eyes 3-4 billion euro AIB windfall exclusive of IPO next year

Reuters

DUBLIN (Reuters) - The Irish government plans to sell a 25 percent stake in Allied Irish Banks (ALBK.I) after elections next year and should recover 3 to 4 billion euros of its bailout funds before taking account of the share sale, it said on Thursday.

The rescue of AIB has cost taxpayers 21 billion euros ($23 billion), the most given to any Irish bank still trading, and the government hopes to recover it all over a period of years, including funds raised in the initial public offering (IPO).

Before any sale, the bank must conclude talks with European regulators on reorganising its capital structure, including how much the government can redeem of the 3.5 billion euros of preference shares it owns in the bank.

Finance Minister Michael Noonan said those talks would conclude in the coming weeks, but the share sale would not take place this year: "Next year, god willing we'll be all back in government, we'll be selling 25 percent of AIB," he told reporters. The government must hold an election by April.

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Noonan said the government would recover 3-4 billion euros in the next 12 months through redemption of the preference shares, plans to redeem 1.6 billion euros worth of state-owned contingent capital notes (CoCos) next July, and through dividends on its shares.

The bank, which is 99 percent government owned, this year paid the government a 280 million euro dividend on the preference shares for the first time since they were put in place in 2009.

"They might come into this year's figures but it's not that important. If the markets know that it's in the system, whether it comes in December or January and is attributed to 2016, the market will discount it in advance," Noonan said, referring to when the transactions would take place.

AIB reported an underlying pretax profit of 1.24 billion euros in the six months to June 30, up from 437 million a year earlier and more than the 1.1 billion it made in the whole of 2014.

(Reporting by Padraic Halpin; Editing by Susan Fenton)