Direct Line, the insurance arm of RBS have floated on the London Stock Exchange today at a value of £2.63bn.
The sale of 30% of Direct Line’s shares is part of RBS’s recovery plan following the bailout during the financial crisis in 2008 that left the bank 82% owned by the state. To comply with EU directives Direct Line must sell further shares by the end of 2014.
Shares in both Direct Line and RBS rose in early London trading in response to the float. The proceeds of the share sale will be added to the bank’s cash balance. RBS will initially make £787m from the IPO, with the amount rising to £905m after an over-allotment option is exercised.
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