Bank of Ireland announced tonight it is to sell further shares in the bank at 64 per cent discount as part of a plan to bolster capital.
The bank's three for two rights offer at a price of 55 cents per new unit of ordinary stock is based on today's closing price of €1.53.
The bank plans to sell €3.14 billion new units of ordinary stock to raise €1.725 billion.
If investors decline the offer to buy shares, their stake in the bank will be halved. The bank also plans to sell €500 million in shares to institutional investors under the capital-raising plan.
The State will end up with a stake of about 36 per cent, an increase from the existing holding of 15.7 per cent, if the transaction is approved by the bank's shareholders at an egm later this month.
The bank has raised €1.7 billion by swapping debt over the past year.
The rights issue is being under-written by five companies – Citibank, UBS, Deutsche Bank, Credit Suisse and Davy stockbrokers – who have in turn signed up about 50 international institutions as so-called sub-underwriters.