DUBLIN: Permanent TSB Group Holdings Plc plans to raise 525 million euros ($560 million) of capital to bolster its balance sheet after failing European stress tests last year.
The Irish residential mortgage lender will seek 400 million euros of equity to repay and replace the same amount of contingent convertible notes that the state bought in 2011 as part of a bailout, it said in a statement on Wednesday. It also plans to raise 125 million euros of additional Tier 1 capital.
The lender, 99 percent state-owned after receiving a net 2.7 billion-euro bailout in 2011, said its pretax loss narrowed to 48 million euros last year from 668 million euros in 2013. The European Commission has agreed to a restructuring plan for the company following its rescue, it said on Wednesday. The approval will help the bank as it seeks to raise equity.
“Today’s announcements herald a series of moves which will, on completion, transform the Permanent TSB Group and start the process of returning the group to the private sector as a stand-alone, competitive and successful force,” Chief Executive Officer Jeremy Masding said in the statement.
The government intends to remain a majority shareholder after the sale, which PTSB plans to complete by the end of June, Masding told Newstalk radio in Dublin. Small investors, who own 0.8 percent of the bank, will be allowed to buy stock in the transaction, according to the lender.
