Govt to recapitalise Irish Life

Irelands government confirmed it would foot a 1.1 billion euros bill to recapitalise Irish Life & Permanent after the bancassurer was forced to pull the plug on the sale of its cash-rich life insurance arm, Reuters reported on Saturday. "The Department of Finance has confirmed to Irish Life & Permanent that none of the bids received for Irish Life were acceptable at the present time," the department said in a statement late on Friday. The company had blamed challenging market conditions for shelving the sales process, which started after stress tests held in March under an EU-IMF bail-out showed the group had a four billion euros capital hole. Canada Life, a unit of Canadas second-largest life insurer Great-West Lifeco, had been the lead candidate to buy the business, which has an embedded value of around 1.6 billion euros, a source told Reuters last week. A deepening debt crisis in the euro zone had put Canada Life as well as the other potential bidders, finance buyout firm J.C. Flowers in partnership with private equity firm Apollo Global Management and Canadas CVC, off proceeding with a deal, the Irish Independent newspaper reported on Saturday, citing sources. Irelands government has already poured 2.7 billion euros into Irish Life & Permanent, which came under pressure when Irelands lenders were locked out of debt markets, creating a huge funding strain for its residential mortgage book.
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