THE GOVERNMENT HAS been granted a High Court order allowing it to complete the takeover of Irish Life, the life assurance business of Irish Life and Permanent, for €1.3 billion.
The court granted the order this afternoon under powerful legislation introduced by former minister Brian Lenihan in 2010.
The move means the government can complete the €70 billion recapitalisation of the banking sector required under the stress tests performed last year.
The takeover follows the State’s takeover of Irish Life’s parent, Irish Life & Permanent, last year.
Today’s order follows the collapse of a proposed sale of the life assurance company to Canada Life last winter; that sale had been expected to raise around €1 billion for the state, but the sale was delayed as a result of market volatility.
Today’s sale means the two bodies can now be considered separate legal entities, and the sale of Irish Life can continue without any impact on the operations of the rest of IL&P.
It also means that Irish Life & Permanent’s regulatory capital is increased by €1.3 billion.
Although the government already owned the parent company, proceeding with the takeover via a High Court order means that the consent of any other IL&P shareholders is not required.
In a statement this afternoon IL&P said the sale would be completed on April 13 with formal completion by the end of June, and stressed that the takeover would have no impact on bank or life policyholders, and that their existing policies, terms and conditions will continue to apply.
Its chairman Alan Cook insisted the court order was a necessary step to complete the recapitalisation of the group’s banking arm, Permanent TSB, and would safeguard the future of the Irish Life life assurance business.
He also stressed the group’s “gratitude to the Irish Government and the Irish taxpayer for the support they have provided to the Bank”.
“Our focus now must be on minimising any further call on the Irish taxpayer and maximising the potential to build sustainable, customer focused businesses which in time can repay the taxpayer for the support we have been given.”
The nominal €1.3 billion price for the takeover is equivalent to the value of Irish Life’s net assets as of last June.
A Department of Finance spokesman yesterday said the next round of banking stress tests will continue as planned in autumn of this year.
This is despite the decision of the European Banking Authority to delay its own tests until early 2013.