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koala_bear

Govenment Selling Lloyds Stake

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Current Price 77.36p

So £18.05bn needed for the other ~32% at current prices.

(6% @ £3.3125bn)

Potential government profit of £4.46bn if all shares are sold at current price.

Edited by koala_bear

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Current Price 77.36p

So £18.05bn needed for the other ~32% at current prices.

(6% @ £3.3125bn)

Potential government profit of £4.46bn if all shares are sold at current price.

18bn out of the economy

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Shares on the government books @ 62 p but they paid 73.6p.

So profit of 3.7p share but then the cost of additional borrowing to buy those shares would be loss making over the 5+ years till full disposal.

http://www.bbc.co.uk...siness-24118129

So what is a fair price for the Taxpayer? Got to be fetching more than £1 a share just to cover official inflation.

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I reckon this will end up being the shortest lived privatization in the history of privatizations!

Hopefully the govt is going short and when they buy it back they'll be worth a lot less and won't turn out to be a bailout to it's chums in the City.

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So what is a fair price for the Taxpayer? Got to be fetching more than £1 a share just to cover official inflation.

Looking at the cumulative financing costs as computed by the National Audit Office, they'd need to sell at an average of about 83p per share to break even (that's assuming they dispose of the total holding soon of course – the interest on borrowing is still accruing). Selling the proposed 6% tranche at around 75p would leave a requirement of 85p for the remainder.

However the NAO's calculation doesn't include 2.9bn in fees that UKFI has received in respect of Lloyds, the bulk of which (2.5bn) relates to the Asset Protection Scheme implicit support. UKFI claims in its annual report that this reduces the net cost of Lloyds shares to 63.1p. If we add the interest costs on the borrowed money to purchase the shares, that would result in a break even price of around 72p.

One way or another I'm sure the Treasury is going to argue that the taxpayer hasn't lost out.

http://www.nao.org.uk/wp-content/uploads/2013/07/HMT-Accounts-2012-13.pdf

http://www.ukfi.co.uk/releases/UKFI%20Annual%20Report%202013_web.pdf

Edit: removed the word 'rate'.

Edited by FreeTrader

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