§ Mr. Gouldasked the Secretary of State for Trade and Industry if he will estimate the fees and commissions which will be paid to City institutions in respect of the forthcoming sale of shares in British Aerospace; and on what basis those fees and commissions will be calculated.
§ Mr. ButcherThe following commissions will be paid to City institutions, all calculated on the basis of the fully paid offer price of 375p per share:
- Underwriters: 0.3 per cent.
- Brokers to the offer: 0.125 per cent.
- Priority applicants: 1.5 per cent. on shares placed firm, 1.25 per cent. on the balance of their applications.
- The total cost of these commissions to the Government will be approximately £6,583,000 (plus VAT = £7,570,000).
Lazard Brothers and Co., Ltd. will also receive a fee for their work as financial advisers to the Government.
Stockbrokers, licensed dealers, members of the National Association of Securities Dealers and Investment Managers, and exempted dealers will be eligible for commission on applications submitted by them on behalf of members of the public, to the extent accepted, at the rate of 1¼ per cent. of the offer price.
It will not be possible to estimate the amount of these commissions until all applications have been examined.