Royal Bank of Scotland floats insurance unit
State-rescued Royal Bank of Scotland on Thursday launched a partial flotation of its insurance subsidiary Direct Line Group on the London stock market ahead of a full sale of the unit by the end of 2014.
RBS raised at least £787 million ($1.261 billion, 978 million euros) from the sale of around a third of Direct Line in an initial public offering (IPO), the bank said in a statement.
The offer price was set at 175 pence, valuing the entire group at £2.625 billion.
Direct Line shares were trading above the launch price, at 181 pence, in limited exchanges on Thursday ahead of the start of full trading of the stock next week.
The EU ordered RBS to sell Direct Line -- a British leader in the fields of motor and home insurance -- after the bank received massive amounts of state aid in the wake of the 2008 financial crisis.
RBS must cede control of Direct Line by the end of next year and must have divested its entire interest by the end of 2014.
"We are very pleased to have successfully completed the Direct Line Group IPO as the first phase in our EU mandated disposal," RBS finance director Bruce Van Saun said in the statement.
"This is another important milestone in RBS Group's restructuring plan."
The Edinburgh-based bank last month said it would cut almost 900 jobs at Direct Line prior to the sale.
RBS is 81-percent owned by the British government following a bailout that totalled £45.5 billion.