British government to further reduce stake in Lloyds

The British government is planning to further cut down its stake in Lloyds Banking Group by selling shares worth £3bn.

British government to further reduce stake in Lloyds

The British government is planning to further cut down its stake in Lloyds Banking Group by selling shares worth £3bn over the next six months.

The move has been recommended by UK Financial Investments (UKFI), the body managing stakes of taxpayers stakes in bailed-out banks.

The government is still unsure about the number and price of shares to be sold, though the process is expected to curb taxpayers’ stake from 24.9% to below 20% in the group.

The Treasury said that the shares will not be sold under the average price of 73.6p paid by the previous government to rescue the lender from taxpayers with a £20bn bail-out.

The shares can be purchased by both retail as well as institutional investors through brokers in the normal way, though they will be oblivious to whether they are buying the new shares sold by the government.

The new sale, unlike a typical sell-off, will be devoid of any discount, and investors have to pay the market price.

The government has earlier reduced its stake from 40% to 24.9% in two big sales to institutional investors since last September which have helped raise £7.4bn (approximately $11.6bn).