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Government reveals fresh plans to sell down Lloyds stake

by: Hannah Smith
  • 17/12/2014
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Government reveals fresh plans to sell down Lloyds stake
The UK government is to sell another tranche of shares in Lloyds Banking Group as it moves to return the bank to private ownership.

UK Financial Investments (UKFI), the unit of the Treasury which manages the government’s stakes in bailed-out banks Lloyds and RBS, said today it will sell off a further part of its near-25% shareholding in Lloyds through a trading plan.

Shares will not be sold below the 73.6p average price the previous government paid for them, and no more than 15% of the aggregate total trading volume in the company will be sold over the duration of the plan.

The number of shares sold under the trading plan will depend on market conditions, the Treasury said.

A trading plan involves gradually selling shares in the market over time. The trading plan for Lloyds shares has been initiated today, although the sale may not happen until the new year.

The plan will be in place for approximately six months, and will be managed by Morgan Stanley.

The previous sales of the government’s shares in Lloyds have raised £7.4bn, reducing the government’s stake in the bank from around 40% to just under 25%.

Chancellor George Osborne said: “I can confirm today that the government is taking the next step in returning Lloyds Banking Group to private ownership.

“The trading plan I am initiating today is made possible by our long term economic plan which is delivering a more secure and resilient economy. It is another step in reducing our national debt and in getting taxpayers’ money back.”

The government hopes to be able to turn a profit for taxpayers on the sale of the shareholding.

Lloyds, RBS, and HBOS were rescued from the brink of collapse by a 2008-2009 government bailout package worth £37bn.

Lloyds shares are down 3.4% year to date and trade at a current level of 76p a share.

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