Lloyds Banking Group is to stage the UK's biggest-ever rights issue in its bid to avoid the Government's asset protection scheme (APS).
The share offer, worth £13.5 billion, forms part of a £21 billion fundraising plan unveiled by the banking group.
With Lloyds hopeful of raising sufficient capital through the market, the move will prevent the Government's stake from rising above its current level of 43%.
However, it will still have to pay the Government a fee of £2.5 billion in return for the protection already provided by the taxpayer since the announcement of the asset protection scheme earlier this year.
It will also have to sell off parts of its business following long-running negotiations with Brussels over remedies for receiving state aid.
This will mean the creation and subsequent disposal of a new retail banking business with at least 600 branches, a 4.6% share of personal current accounts and 19% of the group's mortgage assets.
Under the plan, Lloyds will dispose of the branches and business of Cheltenham & Gloucester and Lloyds TSB Scotland, as well as additional Lloyds TSB branches in England and Wales.
The TSB brand and internet operation Intelligent Finance will also be placed into the business, which will be disposed of within four years.
© 2012 The Press Association Limited
