The Royal Bank of Scotland has put into motion its plan to further reduce its exposure in Direct Line. The move is to take advantage in the 20% rise in the insurer's share price since its flotation last year.
The bank has already sold 34.72% of its shares in Direct Line during the October 2012 IPO. The plan is to sell another 15.3% through placement with institutional investors eventually divesting all its shareholdings with the insurer. This is in compliance with the European Commission condition set to allow banks to be bailed out by the UK government during the 2008 recession.
The 229.4 million shares to be floated would amount to a projected GBP 482 million or US$718 million using Tuesday's closing share rates.
For its part, RBS is also under the gun to raise capital financing as required by government regulators. Another sale from RBS is in the works, this time with US business Citizens through an IPO with the NYSE.
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