Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) signed an agreement with a group of investors for an initial public offering (IPO) of  Williams & Glyn’s business, formerly known as ‘Project Rainbow,’ composed of 314 branches in the United Kingdom.

Royal Bank of Scotland RBS

The consortium of investors, including Corsair Capital, Centerbridge Partners, the Church of Commissioners for England, and RIT Capital Partners agreed to a £600 million pre-IPO investment deal for Williams & Glyn’s, which will be listed in the London Stock Exchange.

RBS is majority owned (81 percent) by the British government

Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) is majority owned (81 percent) by the British government. As part of its bail out agreement, the British bank was required to sell 314 branches in England, Wales, and Scotland. In June, the bank rejected the joint proposal of private equity firms, JC Flowers and Apollo Global Management LLC (NYSE:APO) to acquire its branches.

In a statement, Sir Philip Hampton, chairman of Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) said, “We are delighted to be working in partnership with these investors to establish a new challenger bank for UK customers. Williams & Glyn’s will play an important role in the UK banking landscape and will be an excellent new addition to the market, with a particular strength in small business banking – a sector that is so crucial to the UK’s economic recovery.”

On the other hand, RBS Group Finance Director, Bruce Van Saun, said the deal with the consortium of buyers concluded a competitive bidding process. According to him, the transaction showed that Williams & Glyn’s is an attractive and viable business, and will be positioned as a strong, customer-focused challenger bank.

Number of employees will increase to 6,000: RBS

Williams & Glyn’s has almost 1.7 million clients and 4,500 employees. Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) projected that the number of its employees will increase to 6,000 in the future. The business has a £19.7 billion loan book, funded by £22.2 billion in customer deposits.

According to the British bank, it will work with the European Commission and HMT for the approval of an extension of the schedule of the completion of the sale of Williams & Glyn’s.

RBS will pursue the IPO of Williams & Glyn’s

Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) will pursue the IPO of Williams & Glyn’s after the completion of operational and legal separation of the business as a standalone bank.

The bank will issue a £600 million bond to the consortium of investors, which is convertible for a minority interest (not more than 49 percent) in the shares of Williams & Glyn’s during its IPO.