U.K. Green Bank Moves Closer to Choosing Golden Shareholders

  • Process underway to find three special share trustees
  • Special share owners can veto deals that aren't green enough

The U.K. Green Investment Bank Plc moved closer to selecting special shareholders who can veto changes to its environmental mission after the institution is privatized.

The national science academy known as the Royal Society, Scotland’s Institute of Chartered Accountants and Scotland’s Law Society will help create a committee to protect the mandate of the bank, according to a document seen by Bloomberg.

The bank established Green Purposes Company Ltd. on 10 March to hold the special share. The Royal Society, ICAS and The Law Society of Scotland will now choose three people from their institutions who will in turn select three individual trustees of Green Purposes, according to the statement.

The government this month started the sale of the Green Investment Bank in a deal that may value the institution at as much as 4.2 billion pounds ($6 billion). Ministers established the golden share to allay the concerns of environmentalists and lawmakers that privatization would put the bank’s carbon reduction mission at risk.

Potential Bidders

Potential bidders range from infrastructure and pension funds, to insurers, commercial banks and sovereign wealth funds. The government has previously said it expects the sale to be completed by the end of the year. The final buyer may be a consortium of companies.

Macquarie Group Ltd and M&G Investments, a unit of Prudential Plc, may bid for the bank, according to reports by the Sunday Times and Infrastructure Investor magazine. The Universities Superannuation Scheme, Aviva Plc and Pensions Infrastructure Platform were also named as potential investors by the Sunday Times. Lancashire County Council, also named in the article, said it’s not considering an investment in the bank.

The government set up the bank in 2012 to spur investments in renewables. It has pledged a total of 3.8 billion pounds in funding for the institution’s investments. The bank has since invested about 2.8 billion pounds of that and after selling some projects, currently holds about 2 billion pounds of assets. 

That, coupled with plans to invest another 2 billion pounds over the next three years means bidders must come up with about 4 billion pounds.

M&G, The Pensions Infrastructure Platform, Macquarie and Aviva declined to comment. The Universities Superannuation Scheme and Lancashire County Council did not immediately respond to a request for comment.

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