Back in January 2008 when the government nationalised Anglo Irish Bank, it was announced that an independent assessor would be appointed to determine if there was to be any value at all in the company as it stood at that time.
That would have an impact on the Anglo shareholders of record at that time as it would dictate whether or not they would get anything for their shares – then worth 21.7c, down from a record high of €17.53 in 2007.
The process to appoint that assessor has only started recently, according to this story from the Sunday Tribune – Government to appoint assessor to value Anglo Irish Bank shares.
One can only guess how long that process will take, and how long it will take the assessor to come to their final decision.
If the UK is anything to go by (Northern Rock was valued at 0), and based on everything we’re seeing coming out of Anglo since privatisation, the bank should be valued at 0, and shareholders should receive nothing. A company that makes losses as big as Anglos is surely worth nothing.
However, as you can probably guess, I’m a little sceptical about whether or not that will actually be the case.
The government and the Financial Regulator have jumped through hoops in the past few years to prop up Anglo Irish Bank, and by extension, it’s beloved shareholders.
And it’s those favoured shareholders – particularly the better known ones such as those in the “Golden Circle” and more particularly, the Quinn family and related companies – and their needs, that will probably dictate that Anglo Irish Bank will actually have been worth something when it was nationalised – and thereby triggering a payout by the government to those shareholders in exchange for the actually worthless shares.
But that’s just me speculating.