After the swings and roundabouts of the last few days it has now been revealed that not only will Royal Bank of Scotland (RBS) be receiving a massive cash injection from the government, but it is still in talks to sell off a stake in its insurance operation. Renewed talk in the markets is suggesting the RBS is on the verge of selling a 51% stake in the business (which includes the likes of Churchill and Direct Line) to private equity operation CVC Capital Partners.

As we suggested in a number of out recent articles, the vultures are circling the financial markets looking for bargains at a time when companies such as RBS are still desperate for further breathing space. The truth is that the insurance division has been up for sale for nearly a year with bidder after bidder dropping out and forcing the price lower.

There has been no estimate of a price for the possible 51% stake but many in the City believe that the group is being forced to sell the family silverware on the cheap. While retaining a 49% holding still gives them an equity stake in any future revival, control will have been taken away from the group and it will affectively become a silent partner.

»» Return to Homepage

»» Full Insurance News Archive

»» Debt Problem & Need Loan?