STOCK MARKET:.IRISH LIFE and Permanent declined 59 per cent on the stock market after the Government said that it may take control of the company, which has been told it must raise €4 billion by the Central Bank.
The shares fell by 73 per cent at one point, the biggest fall in the stock for more than 17 years, before closing at 17 cent, valuing the company at €46 million.
The company, which owns Permanent TSB bank, said it was exploring a stock market flotation of its pensions and investments, and fund management businesses to raise some of the €4 billion.
Dates in July or September are being considered for the flotation, a company spokesman said.
The company, the only bank to avoid a Government cash bailout since the crisis began, will shortly appoints advisers on the sale.
The businesses to be sold include Irish Life Investment Managers, Irish Life retail and corporate businesses, financial services company Cornmarket and the 30 per cent stake in insurer Allianz.
Irish Life and Permanent’s subordinated debt was downgraded by ratings agency Moodys in the expectation that bondholders would be forced to take losses to help meet the capital bill.
Irish Life and Permanent was “caught in the cross fire” in the Government’s decision to over-capitalise Bank of Ireland and AIB, said Gerry Hassett, chief executive of Irish Life retail business.
The company was told last year it needed to raise €240 million and within six months “the rules of the game had changed and we needed €4 billion”, he said.
Irish Life will be sold before any cash injection by the Government.
Mr Hassett said that Irish Life had an “embedded value” of €1.6 billion and that it planned to float the business unit in the Dublin and London stock markets.
Senior management, including chief executive Kevin Murphy and finance director Dave McCarthy, are expected to move with Irish Life when the business is sold.
