Last update: 07-Dec-2013 3:12 am
Saturday, December 07, 2013
Trinidad & Tobago Guardian Online
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Can we learn anything from the Royal Mail IPO?
In the September 19 edition of the Business Guardian, the commentary headlined “Do trade unionists hate workers?” raised the issue of the opposition of the entity representing the majority of workers at Royal Mail to the privatisation of the venerable UK postal service.
With its deliberately provocative headline and its photograph of Vincent Cabrera, the president of the Banking, Insurance and General Workers Union (BIGWU), the commentary focused on Royal Mail’s IPO, but it concluded with an analysis of the escalation of the share price of First Citizens, which had been listed on the local stock exchange that week.
Some 48,495,665 First Citizens shares—representing 19.3 per cent of the total issued shares of the bank—were offered to local institutions and individuals at $22 a share. The employees of the banking group were allowed to acquire up to 5,000 shares at a 10 per cent discount ($19.80) of the sale price. Those employees were also offered low-interest loans to purchase the shares.
This means that if each of the 1,664 permanent employees of First Citizens and its subsidiaries (which includes employees in Barbados, St Lucia and St Vincent) had taken up their allotment, they would have purchased 8,320,000 shares valued at $164,736,000.
Those shares would have been worth $291,200,000 on paper as of October 14. In effect, the employees of the majority state-owned bank would have increased their collective wealth by $126.4 million.
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