After 7 Years Allied Irish Listed Again, Rio Tinto Repurchases $2.5 B Bonds

Sarla Buch
23 Jun, 2017
New York City

The Irish government sold 25% stake in Allied Irish Banks to raise

[R]4:00 PM Frankfurt – The Irish government sold 25% stake in Allied Irish Banks to raise €3.4 billion in the initial public offering. Spain-based OHL is looking to sell 40% stake in subsidiary and reduce debt. Rio Tinto bought back $2.5 billion of bonds.[/R]

In London trading, FTSE 100 index slid 22.77 or 0.3% to 7,417.12 and in Frankfurt the DAX index decreased 17.76 to 12,757.29.

In Paris, CAC 40 index decreased 21.62 or 0.4% to 5,260.31.

For the week, FTSE 100 index slipped 0.6%, the DAX index fell 0.4% and the CAC 40 index edged down 0.1%.

Allied Irish Banks, Plc was priced today after the Irish government completed the sale of 25% stake in the bank to stock market investors and offered 679 million shares at a price of €4.40 per share and the government estimated to raise €3.4 billion.

AI Bank was valued at €11.94 billion or $13.3 billion and the stock was priced in the middle of offer price range. After sales, the government still holds 75% in the banking and financial services.

AIB was seized by the Irish government in December 2010 and now returned back to the London and Dublin stock markets and the government plans to gradually selloff further stake in the coming years.

The government rescued the bank with a bailout of €21 billion or $23.4 billion during the mid of financial crisis and owned 99.9% of ownership.

Obrascon Huarte Lain SA rose 1.4% to €3.39 after Spain-based construction and engineering services provider said it is exploring the possibility to sell 25% to 40% in its wholly owned subsidiary OHL Concesiones SA and the company is committed to reduce its debt by the end of 2017.

Rio Tinto Plc gained 0.5% to 3,053 pence after the U.K.-based mining and metals producer said that it completed its planned bond buyback today and reduced gross debt by $2.5 billion.

The miner said since 2016, after the latest purchase the nominal value of outstanding bonds was lowered to about $9.5 billion from $21 billion.

The cost of early redemption is estimated to reduce underlying profit in the first-half by about $180 million and cash flow from operating activities by $260 million.

Workspace Group Plc increased 0.5% to 920.50 pence after the U.K.-based property developer said today it agreed to acquire a Grade II listed property in the City of London for £158.7 million.