(RTTNews) - The Irish government announced a recapitalization package for three major financial institutions on Monday. The Minister for Finance said the government intends to inject EUR 5.5 billion into the Anglo Irish Bank, Bank of Ireland and Allied Irish Banks.

In relation to Anglo Irish Bank, the Department of Finance announced an initial investment of EUR 1.5 billion of core tier 1 capital to assist in restructuring the bank’s capital. Subject to approvals, the Government also agreed with Bank of Ireland and Allied Irish Banks that they would each issue EUR 2 billion of perpetual preference shares to the State with a fixed annual dividend of 8%.

The capital injection for Anglo Irish Bank would possibly take place following an Extraordinary General Meeting in mid-January and for Allied Irish Bank and Bank of Ireland, by the end of the first quarter of 2009.

All the institutions may redeem the preference shares within 5 years at the issue price or after 5 years at 125% of the issue price, the Department of Finance stated.

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