HC Deb 03 November 1987 vol 121 cc687-8W
Mr. Ward

asked the Chancellor of the Exchequer if he will make a statement on the outcome of the Government's sale of shares in British Petroleum.

Mr. Norman Lamont

The offers for sale of 2,194 million shares in BP were concluded on 30 October 1987 and provide for total proceeds of £7,017 million. Of this total, proceeds of some £2,552 million are being paid immediately, with the balance spread equally over two instalments in August 1988 and April 1989. £1,513 million has been paid to BP in respect of nearly 459 million new shares which it had issued for subscription by the Treasury.

There were 270,234 applications for nearly 71 million shares at the fixed offer price of 330p each. These applications included 18,008 from existing BP shareholders with entitlements to purchase in the offer and 886 from BP employees. All valid applications have been accepted in full.

A further 2,055 million shares were taken up, at the underwritten price of 330p, by underwriters and sub-underwriters in the following markets (share numbers to the nearest million):

Million shares
United Kingdom 1,179
United States of America 506
Japan 160
Canada 105
Europe 105

The remaining 68 million shares were reserved by the Treasury to meet entitlements to share bonuses and were not underwritten. Some of these shares will be reserved for the approximately 250,000 applicants who are eligible to receive free shares (one for every 10 they hold continuously until 31 October 1990, subject to a maximum of 150 bonus shares). The Government will sell the remaining shares in due course and the proceeds will be additional to those noted above.

The costs of the sale to the Government will be announced as soon as the full details have been worked out.

The Chancellor of the Exchequer also announced on 29 October, at column 540, arrangements, to be operated by the Bank of England, to ensure that there are orderly aftermarkets in BP shares.

Further details of the bank offer will be announced this week.

Mr. Austin Mitchell

asked the Chancellor of the Exchequer whether, in view of his decision to stabilise the market by instructing the Bank of England to purchase BP shares, he intends to extend such arrangements to any other sizeable rights issues to give other companies the same benefits.

Mr. Norman Lamont


Mr. Campbell-Savours

asked the Chancellor of the Exchequer whether the contract or any other agreement with Rothschilds for the flotation of BP allows Rothschilds the right unilaterally to withdraw from the contract or suspend the flotation.

Mr. Norman Lamont

[holding answer 30 October 1987]: No.

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