March 17, 2014 / 10:41 AM / 4 years ago

UPDATE 1-RBS delays annual meeting for talks over dividend share

* Meeting put back to end June from usual May timing

* RBS seeking to cancel UK’s Dividend Access Share

March 17 (Reuters) - Part-nationalised Royal Bank of Scotland has delayed its annual shareholders’ meeting as it seeks to cancel a government-owned share that effectively stops it from paying dividends, sources familiar with the negotiations said.

The bank, 81 percent owned by the government, said it was considering dates for its annual meeting, which normally takes place in April or May, at the end of June.

RBS and Britain’s finance ministry said last November they were in advanced talks with the European Commission to free the bank from the dividend access share - which gives the state priority over dividends and has been seen as a major obstacle to privatisation.

RBS, which was rescued by the government through a 45.5 billion pound ($75.7 billion) bailout during the 2008 financial crisis, would need to negotiate a price for buying its way out of the arrangement.

UK Financial Investments, the agency which manages Britain’s stakes in RBS and Lloyds Banking Group, said in November that the share was valued by the government at 1.5 billion pounds.

Delaying the meeting would allow talks to possibly conclude before the shareholder vote. Any deal would have to be approved by the non-government minority shareholders.

Sources familiar with the negotiations said it was not certain that RBS will reach an agreement with the Treasury and European Commission in time to seek approval from shareholders at a June meeting, but said there was enough of a chance of doing so to justify pushing the AGM back.

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