UK to start sale of Lloyds Banking Group to pension funds this year
15 July 2013
The UK plans to commence the sale of its shares in Lloyds Banking Group, acquired in exchange for funds during the financial crisis in 2008, to pension funds and insurers later this year, rebuffing private equity and sovereign wealth funds that had shown interest.
A provisional stake sale plan being worked out to exit the bank could see the government divest upto 10 per cent of its 39-per cent stake through private palcement, by September if the bank's first-half results, due in August, were well received.
The government's stake is valued at £18 billion.
Lloyds is expected to report a smart rise in profits evoking hopes of being able to resume dividends in 2014 that would add to the attractiveness of the bank's stock to investors.
According to the UK's Conservative-led coalition government, a sale was a milestone in the UK's recovery from the 2008 crisis, during which taxpayers ploughed a combined £66 billion into Lloyds and Royal Bank of Scotland.
The government is cool to the selling its stake to private equity or sovereign wealth funds who have evinced an interest, unless they paid a premium, to safeguard against allegations in the future too cheaply to foreign buyers.
The government wants to ensure that it would not be seen at a later date to have sold off the assets too cheaply to overseas buyers.