The Minister for Finance, Mr McCreevy, has advertised the sale of ICC Bank inviting Irish and overseas financial institutions to tender a price for the State-owned bank before August 23rd next. It is expected to fetch between £250 million and £300 million for the Government.
The sale of the bank has been advertised in the main national newspapers and in the Financial Times.
The sale of the bank, which primarily lends to small and medium sized business sector, is likely to generate strong interest among the Irish and international financial community. Bank of Ireland, Irish Intercontinental Bank and Irish Life & Permanent are all considered to be strong contenders.
The bank is primarily involved in lending to the small and medium sized business sector with a market share of around 9 per cent. It also owns one of the State's largest venture capital portfolios which was valued at £48 million in 1998.
ICC has total assets of £2.1 billion (€2.7 billion) and shareholders funds worth £123 million (€156 million). The bank has been profitable since it was established in 1922 and generated pre-tax profits of £21 million (€27 million) in the year to the end of October 1998. In the six months to the end of April last it reported pre-tax profits of £11.3 million (€14.4 million)
ICC's 358 workforce has already received a 14.9 per cent shareholding in the bank under the terms of an Employee Share Ownership Plan (ESOP). That shareholding is estimated to be worth more than £100,000.
To submit a tender, financial institutions must satisfy a range of criteria set out by the Government. Any prospective buyer must provide an indemnity to the Minister for Finance over the bank's borrowings which are guaranteed by the State. These amounted to £741 million (€941 million) in 1999.
It must also confirm that it is willing to provide an undertaking to maintain the existing terms and conditions of employment, including pension arrangements, for its staff. A guarantee is also sought against any compulsory redundancies.
The Government is being advised by ABN AMRO Corporate Finance on the sale. The advisers will provide information to prospective bidders who meet the requirements set out in the advertisement.
The information memorandum prepared by the advisers will contain general information to give an overall picture of ICC. It will describe the bank, its business, the number of employees and range of customers to help interested parties to decide if they wish to acquire the operation. Financial institutions must apply for the information memorandum by August 9th.
The Minister may invite one or more of the shortlisted applicants to enter into final negotiations on the purchase of his 36.9 million ICC shares pursuant to a general offer.
The sale is expected to be completed in the autumn.
