Bank of Ireland\'s stake sale

Ireland sold a €1.1 billion (Dh 5.88 billion) stake in Bank of Ireland to a group of unidentified investors yesterday to keep the country\'s largest bank out of state hands and provide a rare boost to a battered sector and bruised economy. The government had been widely expected to take control of Bank of Ireland, the last domestic lender outside of state ownership, after it agreed to underwrite a rights issue, the results of which are due today. However — after the sale and rights issue — the government will now own maximum 32 per cent in the bank while new investors will hold between 14 and 37 per cent, the finance ministry said. \"It has been recited far and wide that it is impossible for Ireland to get money on the markets,\" Finance Minister Michael Noonan told national broadcaster RTE. \"Now we have significant private sector investors prepared to put money into Bank of Ireland and that\'s a strong signal internationally.\" Article continues below It is the second significant boost for the Irish government after European partners last week agreed to cut the rate it is charging for a multi-billion euro bailout by 2 percentage points, a change Dublin says could save it up to €1 billion per year. Dublin, which has closed two of its six domestic lenders, merged another two state-controlled institutions and will soon take over a fifth. It has put a €70 billion price on drawing a line under its banking crisis after stress tests in March. Bank of Ireland was told to raise €4.2 billion in additional core tier one capital following stress tests in March. The tests were required under the terms of the €85 billion European Union-International Monetary Fund bailout Ireland received late last year. The state has shrunk the bill for bailing out its banks by around €5 billion by sharing losses with subordinated debt holders. Bank of Ireland raised €1.96 billion by hitting junior bond holders with losses of up to 90 per cent and expects to secure another 510 million from further burden sharing. The bank\'s shares, which reached nearly €12 in early 2007 when Ireland\'s property boom was at its height, cost 11 euro cents yesterday, up 8.9 per cent on the day. \"Foreign investment in Bank of Ireland is an important milestone for the government... It sends a positive signal to the market after what has been a fairly miserable 18 months for the Irish banking sector,\" Dublin-based Glas Securities wrote in a note.