Catherine Connolly (Galway West, Independent)
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206. To ask the Minister for Finance further to his Department’s press release on 23 March 2017, the criteria applied during the tender competition for the firms selected as bookrunners; the expertise each individual firm will offer; the reason so many global firms are required when each firm selected has local expertise; the reason five firms are required to act as bookrunners; the fees each firm will charge for their services; and if he will make a statement on the matter. [16555/17]

Catherine Connolly (Galway West, Independent)
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207. To ask the Minister for Finance the fees already paid to banks and institutions (details supplied) since their appointments as joint global co-ordinators and bookrunners in December 2016; the work they have carried out since their appointment; the reason for the appointment of five more bookrunners when three global firms were already in the position; and if he will make a statement on the matter. [16556/17]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 206 and 207 together.

In December 2016, following a competitive procurement process, I announced that three firms were appointed to act as joint global co-ordinators to lead a selling syndicate in preparation for a possible AIB IPO. On the 23rd of March this year I further announced the addition of five joint bookrunners and a co-lead manager to the syndicate. The syndicate banks have been appointed until July 2018. This provides the State with optionality on the timing of any such transaction through 2017 and 2018.

A banking syndicate is a group of investment banks who are appointed to plan, structure and execute an IPO on behalf of a selling shareholder, in this case the sale of the State's shares in AIB in line with the provisions set out in the Programme for a Partnership Government. The three global coordinators lead the transaction, performing most of the work, while the bookrunners and co-lead manager will help to ensure coverage of the broadest possible range of relevant investors both by type and geography when it comes to the marketing and sales effort. A strong banking syndicate is critical to the successful design and execution of an IPO, building investor interest in the shares and ultimately maximising value for the taxpayer.

An IPO is a complex and specialised undertaking, and my Department and their advisors have made significant progress in their preparations. Work done by the global coordinators so far includes analysis of the bank's business plan and potential 'equity story' which involved engagement with the bank's management team, planning a comprehensive marketing programme to international investors, due diligence, offer structuring as well as other necessary workstreams.

Fees are only payable to the syndicate on the completion of a successful transaction (i.e. no fees have been paid to date), and are proportional to the value of the transaction. As such it is not possible to provide the exact quantum of fees that would be paid as no transaction has occurred. The fees that have been negotiated by my officials are very competitive by reference to comparable transactions and are capped, while the number of banks appointed is also within precedent for an equity capital market transaction of this nature and size and does not affect the overall fee level payable.

Further, the Deputy should be aware that in line with the State agreements with AIB, that all fees incurred by the State in relation to any capital transaction will be paid by the bank.