1st Jun 2015 10:13
LONDON (Alliance News) - UK Financial Investments Ltd Monday said it has extended the trading plan under which it is selling the UK government's stake in Lloyds Banking Group PLC back to the market by a further six months, as the government confirmed that a further 1% stake in the bank has been sold.
The UK government also confirmed that Lloyds shares will be sold to retail investors "in the next 12 months". Further details will be set out in due course, it added.
UKFI, which manages the government's stakes in financial institutions that were bailed out during the financial crisis, said the trading plan will continue to be managed by investment bank Morgan Stanley and will now run until no later than the end of December 2015. The original plan, announced last December, was due to end on June 30.
The plan includes a provision that up to 15% of the aggregate total trading volume in the bank be sold over the duration of the plan. The actual number sold will depend on market conditions and is at the full discretion of Morgan Stanley.
"As with all disposals, delivering value for money for the taxpayer is a key consideration and shares will not be sold below the average price per share paid for them," UKFI said.
So far, 4.2 billion Lloyds shares have been sold under the trading plan plan, leaving the UK government with about 13.6 billion shares, or a stake of just under 19%. Last month, stock exchange disclosures showed the stake had dropped to 19.93% from 20.95%, and a fresh disclosure on Monday showed the stake has now dropped to 18.99%.
Prior to the launch of the trading plan, UKFI had sold a 7.78% stake in Lloyds in a placing in March 2014 and a stake of about 6% through a placing in September 2013.
The UK government originally owned a stake of about 41% in Lloyds after ploughing GBP20 billion into the bank during 2008. That came after Lloyds acquired ailing lender HBOS in a deal that was sanctioned by the government of the time.
The Treasury said Monday that the latest stake sale means it has now recovered almost GBP3.5 billion for the taxpayer from the trading plan, bringing the total recovered from Lloyds in total to over GBP10.5 billion. Shares sold under the trading plan have been sold for an average price of over 80 pence, above the 73.6 pence that the government paid for the shares.
The extension of the trading plan means Chancellor of the Exchequer George Osborne can meet his pledge to sell at least GBP9 billion of Lloyds shares in fiscal 2015-21016.
"We?re determined to get on with the job of returning Lloyds to private ownership. That?s why I?m extending the plan for six months so that we can make even more progress in returning money to the taxpayer and paying down the national debt," Osborne said.
Lloyds Banking Group shares were up 1.4% at 88.99 pence Monday morning, the second-best performer on the FTSE 100.
By Steve McGrath; [email protected]; @stevemcgrath1
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