Permanent TSB Group Holdings Plc, the holding company for Permanent TSB bank and its subsidiaries, is seeking court approval for a share capital reduction. The group, represented by Paul Gallagher SC, says the reduction is an important aspect of enhancing its regulatory position and compliance with its future regulatory capital requirements.

In its Commercial Court petition the group wants to cancel 3.6 billion deferred shares, a legacy of its capital reorganisations in 2011 and 2015 when the State bailed out the former Irish Life & Permanent and its initial public offer of shares resulted in the Government selling off a 25 per cent stake in the bank.

The application follows passage of a special resolution in favour of the proposed reduction at the company’s agm in May 2017.

According to the group, the deferred shares are worth €0.289 each, and have a total nominal value of €1.09 million.

Under the terms of the proposed capital reduction scheme, holders of the deferred shares, which includes many smaller investors, will receive a payment of €1.5 million.

The deferred shares were carved out of existing shares following the share capital reorganisations in 2011 and 2015. Holders of deferred shares have no rights to participate at general meetings or in the profits of the company.

Since 2015 their sole right is on a winding up or capital reduction is to the preferential payment of a total of €1.5 million.

Mr Justice Brian McGovern agreed on Monday to list the petition for hearing in the Commercial Court next month.