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In the much anticipated biggest initial public offering on the London Stock Exchange since Glencore International’s last year, Direct Line Insurance Group, a leading motor and home insurance provider in the United Kingdom, is poised to become one of the largest publicly listed companies when it joins the premium listing. Here is a short timeline of the company that came into being nearly three decades ago.
26 July 1988 – Direct Line, formerly known as RBS Insurance Group Limited, was incorporated as a private limited company.
2008 – Global financial crisis erupted starting from subprime real estate mortgages and resulted in bankruptcy of financial institutions, including investment bank Lehman Brothers.
2009 – RBS committed to sell its insurance business as a condition of the receipt of State Aid, when it received about £45.5 billion from the UK Government to bail it out and keep it afloat in the midst of the financal crisis.
2011 – Direct Line Group separated its operations from the RBS, including head office and key management functions, including finance, human resources, legal, internal audit, corporate communicatons, logistics, and purcashing, among others.
April 2012 – Direct Line raised £500 million of hybrid debt to boost capital structure.
31 August 2012 – Direct Line’s 1.5 billion issued capital stock of £1 per ordinary share was split into 1.5 billion ordinary shares of 10 pence each and 1.5 billion of deferred shares of 90 pence each. The deferred shares were transferred to Direct Line and cancelled for no value. That gave £1.350 billion back to the company, while valuing it at £150 million. The move, notwithstanding, did not alter the earnings per share calculation.
3 September 2012 – Direct Line’s Board of Directors approved £200 million dividend to be paid to RBS.
5 September 2012 – Around 900 jobs was announced to be cut from Direct Line Group as part of the company’s target to raise about £100 million in cost savings by 2014.
14 September 2012 – Royal Bank of Scotland announced its intention to float at least 25% of the issued shares of Direct Line in an IPO on the London Stock Exchange.
28 September 2012 – RBS disclosed the price range and prospectus for the IPO. Price range was set between 160 pence and 195 pence, valuing the company around £2.663 billion.
Future Announcements Expected:
11 October 2012 – Announcement of final pricing and conditional dealings of Direct Line shares.
16 October 2012 – Admission and unconditional dealings of Direct Line Shares.
2013 – RBS targets to divest the majority shareholdings in Direct Line.
2014 – Full divestment of all interests will be completed.
