Partner Article

RBS raises £787m from Direct Line flotation

Shares in the newly floated insurer, Direct Line Group, rose by 5% on Thursday morning after the Royal Bank of Scotland launched it onto the stock exchange. Direct Line announced an initial offering of 175 pence per ordinary share, and share prices increased to 184 pence by 10 o’clock. RBS was able to raise £787m from 30% of the firm’s shares.

The sale of RBS’s insurance arm was a condition of a £45bn bailout from the Government, set by the European Commision. The bank will hold 65.3% of the company’s 1,500 million shares, while 450 million were released. Direct Line Group was valued at £2.63bn in its entirety after its successful debut on the market.

RBS Group Finance Director, Bruce Van Saun, commented on the successful completion of Direct Line’s IPO. He said: “This is another important milestone in RBS Group’s restructuring plan. The successful offering rests on outstanding effort by the Direct Line management team to re-position the business, while also gearing up to the demands of being a separate public company. We believe Direct Line is on the path to a bright future.”

Paul Geddes, Chief Executive Officer of Direct Line Group, added: “We are delighted with the level of demand institutional and retail investors have shown in Direct Line Group, reflecting the recognition of our clear strategy and key strengths of distribution, scale and market leading brands. As we move forward we will continue with our aim of providing customers with excellent products and service levels, whilst seeking to deliver sustainable returns for our shareholders.”

This was posted in Bdaily's Members' News section by Miranda Dobson .