12.09.13
Royal Mail part-privatisation to begin
The Government is to sell off the majority of Royal Mail within weeks.
Employees will get 10% of the business, with the rest of the shares to be sold offered to investors and members of the public, though there is a £750 minimum.
The Communication Workers Union is balloting for strike action against the privatisation.
Labour, which abandoned its own part-privatisation plans for Royal Mail in 2009, accused the Government of a “politically-motivated fire sale”, but business secretary Vince Cable said: “HM Government is taking action to secure a healthy future for the company. These measures will help ensure the long term sustainability of the six days a week, one-price-goes-anywhere universal postal service.”
The Government has launched a ‘Royal Mail Share Offer’ website at www.gov.uk/royalmailshares, which says: “The Government intends to dispose of a majority of the existing ordinary shares, taking into account the shares sold and the 10% of Royal Mail to be made available for free to around 150,000 eligible UK-based Royal Mail employees under an employee free shares offer at the time listing.
“The Government will retain flexibility around the size of the stake to be sold, as this will be influenced by market conditions at the time of the transaction, investor demand and the objective to ensure that value for money for the taxpayer is achieved.”
It adds: “In the absence of unforeseen circumstances, Royal Mail intends to propose a final dividend only, to be paid in July 2014, of £133m for its 2014 financial year.”
Moya Greene, Chief Executive Officer of Royal Mail, said: “Our strategy is delivering a revitalised company, with a unique UK, multi-use network through which we are proud to deliver the universal postal service for all UK citizens. This network and our strong brand, coupled with the high service quality delivered by our people enable us to take full advantage of the growth in UK e-commerce to further enhance our pre-eminent parcels business. Combining this UK presence with our pan-European parcels business GLS, should result in a financial profile that combines revenue growth and margin progression to underpin strong cash flow generation.”
The full financial details are at: https://royalmailshares.service.gov.uk/media/1813/Press-Release-Intention-to-Float-.pdf
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