The Royal Bank of Scotland’s attempt to recapitalise with a share issue has had a very small uptake from the market. The government will now take up the shares and will own around 58% of the RBS group, which includes NatWest Bank. The government will pay around £15 billion for it’s stake in the group.
The poor uptake of shares had been predicted because the offer price was actually about 10 pence above the trading price of the shares. The government will also pump an additional £5 billion into the bank in the form of a preference share purchase.
RBS group fell into difficulty in the wake of the credit crunch, the global debt crisis and the collapse of the US sub prime market.
