By Max Colchester
The U.K. Treasury started the long-awaited privatization of
Royal Bank of Scotland Group PLC on Monday, announcing it would
sell a 5.2% stake in the lender.
The government, which owns a 78% stake in RBS following a
bailout in 2008, expects to raise around GBP2 billion ($3.1
billion) from the sale, according to a person familiar with the
matter.
The U.K. government pumped in GBP45.5 billion to rescue RBS
during the crisis at an average price of GBP5 per share. RBS
currently trades at GBP3.40 per share. The sale will likely
generate a loss for the taxpayer. The disposal, done via an
overnight book build, will likely see shares offered at a further
discount to that price.
U.K. Financial Investments Ltd., a company set up to manage the
government's bank shareholdings, "advised the Chancellor it would
be appropriate to conduct the first sale of the government's
shareholding in the Royal Bank of Scotland. The Chancellor agrees
with that advice and has authorised the process to begin," the U.K.
Treasury said in a statement.
Write to Max Colchester at max.colchester@wsj.com
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