§ Mr. Hannamasked the Secretary of State for Energy if he will make a further statement about the privatisation of British Gas.
§ Mr. Peter WalkerThis morning, the offer for sale of 4,025,500,000 ordinary shares in British Gas plc has been fully underwritten at a price of 135p per share. 1,615 million shares are initially being offered to the general public including British Gas customers, employees and pensioners. If the United Kingdom public offer is at least twice subscribed, this number will be increased to 2,579.2 million shares, some 64 per cent. of the total. 1,615 million shares are initially being offered to United Kingdom financial institutions, with the balance being made available to investors in the United States, Canada, Europe and Japan. The underwriting arrangements, which for the first time have been fully synchronised around the world and have included a competitive element, have been put in place at the most competitive rates ever achieved in a Government primary offering.
Prospectuses and application forms will be published in newspapers from Tuesday 25 November. Everyone who has registed with the British Gas share information office will be sent a mini-prospectus and a personalised application form. Copies will also be available from 25 November in banks, post offices and British Gas showrooms. Applications have to be received by 10 am on Wednesday 3 December. Copies of the prospectus have been placed in the Library of the House today.
Small investors will be offered a choice of bonus shares or gas vouchers. I am advised that someone buying 400 shares and opting for vouchers can expect a gross return of 21 per cent. over the first year. Similarly, someone buying 400 shares and choosing the bonus shares can expect a gross return of 11 per cent. per year over the first three years. These calculations assume that both the share price and the dividend payments remain constant.