# 7 bn recapitalisation - Times of London



## z109 (20 Dec 2008)

http://www.timesonline.co.uk/tol/news/world/ireland/article5375904.ece
(Courtesy of KN on the 'pin)
Some key points (but worth reading it all):
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			Banks to get €7bn lifeline
		
Click to expand...

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> *The government plans to inject €5 billion into AIB, Anglo and Bank of Ireland - Anglo may be effecively nationalised*
> 
> THE government is planning to inject a total of €5 billion into Anglo Irish Bank, Bank of Ireland and Allied Irish Banks. It is considering effectively nationalising Anglo Irish Bank, putting in €1 billion in return for a stake of up to 80%.
> 
> ...


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## webtax (21 Dec 2008)

This looks like far too small an amount to cover the impact bad debts will have on the banks capital ratios. Why did they make an announcement of a €10bn plan last week if they are only putting half of this in?

And what's going on with Anglo??? The whole bank is worth €250m, but the government is prepared to buy an 80% stake for €1bn... bargain of the century!


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## Duke of Marmalade (21 Dec 2008)

webtax said:


> This looks like far too small an amount to cover the impact bad debts will have on the banks capital ratios. Why did they make an announcement of a €10bn plan last week if they are only putting half of this in?
> 
> And what's going on with Anglo??? The whole bank is worth €250m, but the government is prepared to buy an 80% stake for €1bn... bargain of the century!


Don't understand your point.  This looks just about right.  The recapitalised bank should be worth €1.25Bn and the government should get 80% of this for its €1Bn.


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## webtax (21 Dec 2008)

My point is the bank is essentially worthless. The government should offer them €1 for the whole lot, not a cent more and then decide what to do with recapitalising it as the UK did with a couple of their banks. That €250m could be worth a lot more if the bank eventually recovers as a result of the governments actions over the next few years. Why should they leave that behind for the existing shareholders when that money will be needed desperately when the time comes?


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