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Ash4781

Ukfi Lines Up Banks To Help In Lloyds And Rbs Sale

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http://www.telegraph.co.uk/finance/newsbys...d-RBS-sale.html

UK Financial Investments has begun a "beauty parade" of advisers to establish a short-list of "pre-qualified banks" to which it will turn to sell its 70pc stake in Royal Bank of Scotland and 43pc holding in Lloyds Banking Group.

Although UKFI stressed that it "is not currently planning any immediate transactions", the move will be seen as an attempt to recoup some taxpayer money as early as this year.

Investment banks have already been knocking at UKFI's door with proposals on how to reduce the state's exposure profitably, with one eye on the fees to be earned from selling off such an enormous amount of stock. Credit Suisse and Citi are currently the Treasury's main advisers but all major investment banks will be bidding.

UKFI is looking at a number of options, including public share offerings, private placements and exchangeable bonds. It needs to sell RBS shares above 50.5p and Lloyds shares above 122.6p to make a profit. RBS shares closed at 38.4p and Lloyds at 67.47p.

With the state's investment under water, the bankers are currently only considering exchangeable bonds, which would be sold at a small premium to the state's entry price and pay a minimal interest rate for a fixed term, likely to be three years. The buyer would then take ownership of the shares if they have risen above the initial sale price, pocketing a profit.

Convertible instruments have proved popular with Middle Eastern investors and "pre-qualifying banks" are likely to show an ability to find potential buyers. UKFI will also select its short-list based on the "indicated fee levels" advisers plan to charge.

It said: "Given the very large scale of holdings, and hence of the transactions, UKFI expects fees to be highly competitive and reward favourable outcomes for the taxpayer."

The Treasury has already paid £11.5m in fees so far this year and £7.1m last year to investment banks in relation to the financial crisis.

UKFI will conduct a beauty parade every year "to minimise the danger of leaks to the market as a result of undertaking formal selection processes at the time of specific transactions".

The process will be run by John Crompton, the ex-Merrill Lynch banker now in charge of managing the stakes at UKFI.

Here we go again

This company was setup edit: to protect interest of the tax payers ?

Edited by Ash4781

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http://www.telegraph.co.uk/finance/newsbys...d-RBS-sale.html

Here we go again

This company was setup edit: to protect interest of the tax payers ?

Brown's desperate for cash. He's only got Royal Mail, the Met Office and Ordnance Survey left on the stall. Well, apart from those 'Downing Street Wallets' they sell in the Westminster souvenir shop.

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Investment banks have already been knocking at UKFI's door

Jobs for the boys. Goldman Sachs can't be that far from the trough either.

Probably charge massive underwriting fee's for a racing certainty too.

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When they fail again the government can buy back the shares ;) (provide some expert advice here?)

John McFall says we should turn them into building societies. Oh yeah then we can re-float them (where's my fee?)

Whatever :rolleyes: . If housing transactions don't pickup people will saying what is this 'building society'?

http://www.mirror.co.uk/news/top-stories/2...15875-21520581/

Edited by Ash4781

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