3rd Aug 2015 16:35
LONDON (Alliance News) - UK Financial Investments Ltd late Monday said it will begin selling the UK government's shareholding in the Royal Bank of Scotland Group PLC with the offer of a 5.2% stake to institutional investors.
The 5.2% stake represents approximately 600 million RBS shares, and the price at which they are sold will be determined by way of an accelerated bookbuilding process, UKFI said.
Following the transaction, HM Treasury will hold a 73.2% economic interest in RBS including ordinary and B shares, and a 52% of RBS ordinary shares.
UKFI said that no further shares will be sold by the UK government for a period of 90 calendar days following the completion of the placing, without the prior written consent of a majority of the bookrunners.
The bookrunners comprise Citigroup Global Markets, Goldman Sachs International, Morgan Stanley & Co International and UBS. NM Rothschild & Sons is acting as capital markets adviser.
UKFI is the body responsible for managing the taxpayer's stakes in bailed-out banks. Last month, UKFI Chairman James Leigh-Pemberton wrote to Chancellor George Osborne to say that a minimum of GBP2 billion could be raised in the current 2015-16 fiscal year from the sale of part of the government's shareholding in RBS, while delivering value to taxpayers.
However, the current market price for RBS shares means the 5.2% stake will be sold at a loss.
The UK pumped GBP45.5 billion into the bank during the global financial crisis of 2007-09.
Leigh-Pemberton said in July that he thought at least GBP25 billion could be raised by selling more than 75% of the government's stake in RBS at the market price before May 2020, so long as market conditions are supportive.
Monday's announcement follows RBS's interim results announcement on Thursday last week. RBS said it doesn't expect to return capital to shareholders until at least 2017 and warned of a "noisy" year ahead after posting a surprise net profit in the second quarter.
Chief Executive Ross McEwan told journalists he intends to go "further and faster" with the state-backed bank's strategy, as RBS continues to run down businesses and assets it no longer wants or needs, resolves the legal and regulatory issues over its past conduct, and improves the performance of the businesses it wants to keep.
Shares in RBS closed down 1.3% at 337.60 pence on Monday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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