Extension possible for Lloyds sale deadline

BRITAIN is considering selling more shares in Lloyds Banking Group by extending a trading facility beyond the current deadline at the end of June.

Morgan Stanley has sold a five percent stake in Lloyds since December through a “pre-arranged trading plan” that it was asked to undertake by UK Financial Investments, the government agency managing its stakes in bailed-out banks.

The government’s stake has been cut to 19.9 per cent from 24.9 per cent through the plan, which has so far raised over £2.5bn for taxpayers. An extension could help the government to return Lloyds fully to private ownership in the next year.

The trading plan is due to end on June 30 but may be prolonged to accelerate the government’s exit.

The process, known as a “dribble out”, allowed Morgan Stanley to undertake regular sales of the shares provided they were sold above the government’s 73.6 pence buy-in price and the sales didn’t exceed 15 percent of overall trading volumes.

It effectively allowed the government to continue selling shares in Lloyds in the run-up to this month’s election without facing political fallout.

Chancellor George Osborne said in March that he wanted to sell at least £9bn worth of stock in Lloyds over the next year. In addition, the government plans to sell a chunk of shares to private retail investors, potentially raising £4bn.