Successful execution of off-market share sale
As set out at Budget 2021, the government intends to fully dispose of the NatWest (formerly Royal Bank of Scotland Group plc) shareholding by 2025-26, subject to market conditions and any sale achieving value for money. The considerable economic impact and uncertainty caused by COVID-19 had a significant effect on global financial markets and prevented any realistic opportunities for UKGI to transact during 2020.
On 19 March 2021, UKGI successfully executed the disposal of approximately £1.1bn worth of NWG shares, representing 4.86% of the company, by way of a directed buyback transaction. A total of c.591m shares were sold at the 18 March 2021 closing market price of 190.5p per share. The reduction in the government’s shareholding is less than the percentage sold following the cancellation of shares by NatWest. Following this transaction, the government’s shareholding decreased to 59.8%*.
This innovative structure represented the first sale of shares via an off-market share sale directly to the company undertaken by the government. UKGI supported HM Treasury by designing, developing and implementing the transaction. As a result, the government, supported by UKGI’s advice, delivered a successful transaction which represented value for money.
The sale represented an important step in the government’s plan to return institutions brought into public ownership as a result of the 2007-2008 financial crisis to private ownership.
*The government’s shareholding has decreased further following subsequent transactions. As of 28 March 2022, this figure was 48.1%.