Capitalism in Britain

single steel complex --the five-plant United Steel Cos. Ltd., which last year produced 13 1/2% (2,172,000tons) of all British steel -- went on sale to the public last week. It was the first nationalized steel company to be offered for public sale,* thus represented the biggest step yet taken by the Conservatives to turn the industry back, as promised, to private ownership.

Former owners of United Steel got first crack at the shares, and even though the company has been modernized and expanded nearly 100% while in government hands, they can exchange, on a value-for-value basis, the government shares given them when the company was nationalized. The company, capitalized at -L-16 million when nationalized, is capitalized at -L-30 million ($84 million) in the stock sale. About one-third of its ownership is represented by this issue, 10,194,-ooo shares priced at 25 shillings ($3.50).

As Britain's largest and most efficient steel complex, United was an attractive investment. But the government made it even more so by estimating an interest rate of 7 1/4% on the shares, about 1 1/2% more than the going rate on comparable securities. Moreover, to compensate for fears that owners might simply lose their property all over again should the Labor Party get reelected, the government provided that "gilt edges" (government bonds) may be traded for the steel shares at a ratio greater than their market value.

Nine of London's top-drawer underwriting houses guaranteed to buy any unsold stock, but they hope the public will buy it all. They feel that the more widely the ownership is held, the less likely that Britain's Socialists will try to nationalize the industry again.

-Two other companies have been sold privately (TIME, Aug. 17).

This file is automatically generated by a robot program, so reader's discretion is required.