Written answers

Thursday, 15 January 2015

Department of Finance

Banks Recapitalisation

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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67. To ask the Minister for Finance his views on comments by the Minister of State at his Department regarding a possible pro bono fee arrangement with the firm appointed to provided advice regarding capital restructuring and other related matters in relation to State investment in AIB; the fee structure that will be in place; and if he will make a statement on the matter. [2024/15]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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72. To ask the Minister for Finance the terms on which a company (details supplied) has been appointed by his Department in respect of the possible sale of AIB; if a contract has been awarded; if a competitive tendering procedure took place; and if he will make a statement on the matter. [2121/15]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 67 and 72 together.

As the Deputy is aware, within the past few days, I have awarded a contract to Goldman Sachs International to provide financial advice to the Department of Finance in relation to capital restructuring actions (and other related matters) with respect to the State's investments in AIB.

I can confirm for the Deputy that the duration of the contract is not fixed but is expected to run up to the summer of 2015. I can also confirm that Goldman Sachs International has been engaged on a pro bono basis. This is a good outcome for the State and we understand is not unusual internationally given firms desire to be associated with such high visibility government work. In fact a number of the tenderers offered their services on a pro bono basis. 

The award follows the establishment by the Department last year of three separate panels of financial advisers. These panels were put in place to principally facilitate the provision of timely advice in relation to our banking investments though the panels are available for the wider Department to use in other areas if deemed necessary.

The award of the current contract followed a competitive tendering process with each of the eleven firms on Panel 1 (which covers capital markets, strategic, M&A and restructuring advice) being invited to submit a tender. Prior to the year end, each of the firms accepted the invitation and the tendering process included face-to-face presentations by each of the firms to a panel of Department of Finance officials. Arising from these presentations, each of the firms was scored across a number of standard criteria with Goldman Sachs International being adjudged to have achieved the highest aggregated score. Accordingly, they were awarded the contract.

As I have indicated previously, no decision has been taken in relation to the State exiting any of its investments in AIB. What we intend to do during the first half of 2015 is make the bank's balance sheet fit for purpose and put together a roadmap that will see the bank start to return cash to the State. Upon completion of this work we will take stock of our options with respect to the future ownership of the bank.

Details of the firms included on Panel 1 can be found on the Department's website and I attach the following link for the benefit of the Deputy.

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