Guardian UK (Link) - Jill Treanor, Nick Mathiason (March 7, 2009)
The government today confirmed it will take majority control of Lloyds Banking Group, with the taxpayer owning 65% of the voting shares in return for insuring £260bn of the group's toxic assets.
After days of detailed negotiations the terms of the takeover were announced by the Treasury, with Lloyds making a commitment to lend at least £28bn over the next few years.
The government is to insure the bank's riskiest loans and in return the taxpayer will up its ownership of the bank from 43% to 65% – rising to 77% when non-voting shares are included.
Alongside taking extra shares and obtaining the commitment to lend to businesses and individuals, the Treasury will upgrade £4bn of the non-voting shares it already holds.
The government's fee for limiting Lloyds' losses from £260bn of potentially bad assets totals £15.6bn. Under the insurance scheme, Lloyds will take the first hit of up to £25bn on toxic assets before the taxpayer steps in.
Recent Comments