The European Commission has today approved the Irish Government's €3.5 billion recapitalisation of Bank of Ireland.
The Commission said the measure was be in line with its Guidance Communications on state aid and constituted "an adequate means to remedy a serious disturbance in the Irish economy.
The package has restrictions on the payment of dividends and curbs on executives' pay, among other conditions.
Under the plan, the Government is to provide €3.5 billion in return for preference shares with a fixed dividend of 8 per cent payable in cash or ordinary shares.
The European Commission was formally notified of the Government's intention to recapitalise Bank of Ireland with €3.5 billion on March 11th.
"In addition to difficulties caused by the global financial crisis, recent developments with regard to the sharp decrease of Bank of Ireland's shares' value increased the need to reassure the financial markets of the bank's stability," the Commission said in a statement.
The bank will need to submit a restructuring plan within six months to the Commission for approval.
Bank of Ireland shareholders will hold an extraordinary general meeting (egm) or “court” at the Savoy cinema, O’Connell Street, Dublin, tomorrow to vote on the Government’s plan to recapitalise the bank.
