Minister hints at £9bn Royal Mail sell-off

[TrueBlueTerrier]

Royal Mail could be sold off in one of the biggest-ever privatisations of a public service, it was reported last night.

Ed Davey, the Postal Affairs minister, said the Government was considering a £9billion stock market flotation to raise money for the beleaguered company.
Fresh investment would be the only way to tackle the 'lethal combination' of a gaping financial hole in its pension scheme and a decline in business, he added.

Under the scheme, Royal Mail, which runs the postal delivery service, would be privatised while the Post Office, which runs 12,000 branches across the country, would remain in government hands.

In his first interview since taking office, Mr Davey also called for an end to big pay packets for Royal Mail executives and revealed that ministers had put pressure on the company to cut the pay of new chief executive Moya Greene.

Predecessor Adam Crozier earned more than £2million last year.

Mr Davey also insisted the Coalition-would not repeat Labour's 'mass closure-programme' of Post Office branches and said postal workers could be given shares in a privatisation, giving them an incentive to improve performance.

'The truth is that Royal Mail's situation, if nothing is done, will become increasingly dire,' he said.

'If we don't transform Royal Mail, it will be dragged down by a lethal combination of falling mail volumes, low investment and potentially one of the worst pension crises for employees in UK history.'
A Royal Mail spokesman was unavailable for comment last night.


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[Dogs of War]

Why would anybody want to sell a company that's making 400 million a year.

[TrueBlueTerrier]

Why would anybody want to sell a company that's making 400 million a year.

Because on the year of sale they could potentially make £9 billion in a shares issue, and £11 - £21 Billion in assets from the RMPF.

One that has a £9 billion deficit in its pension fund (an administrative deficit caused by rules & laws) off set by a portfolio of £20 - £30 billion in property.

So if the government sell off RM but keep the Bricks and Mortar they can charge rent or lease the buildings, or they can sell them separately later on when the property market improves. If they also take over the Pension fund and the £9b deficit they can sell off the assets of the PF to pay for it and make money for the government. Rules at present I think don't allow Pension Funds to offset a deficit against property, only against accountable items such as accounts, share certificates, bonds, guilts and current payments.

[pinstripe]

"and said postal workers could be given shares in a privatisation, giving them an incentive to improve performance."

Sorry, but my performance is already at maximum. Knowing that I may get an extra 5p a month won't make me want to work harder to provide TNT etc with mega profits.

[chunk]

Recap in English:
The pension deficit is 9 billion. Royal Mail property assets etc are worth between 30 to 40 billion.
David Camerons government is under pressure to make major cuts to every element of public spending
health, education,local government,transport etc.


This government will try to use the pension deficit as an excuse to raid Royal Mails assets.
whether or not some would go to plug the pension most would be thrown at the national debt.

(irony: deficit caused by previous raid)

[trythat]

So what about the pensions of the NHS, the forces, teachers and civil servants - is the government trying to tell me the only government firm that is in the red is RM.

Do they actually announce what pension deficits are for the other national industries as the above?

[noggin1969]

postal workers could be given shares in a privatisation, giving them an incentive to improve performance.

[chunk]

So what about the pensions of the NHS, the forces, teachers and civil servants - is the government trying to tell me the only government firm that is in the red is RM.

Do they actually announce what pension deficits are for the other national industries as the above?

We are not the only pension fund with a deficit
but we are practically the last unsold government asset.
For many practical reasons you cant sell the police or the navy etc.

[dados]

i dare say that any "shares " we get will come with a string of conditions.
"incentive to improve performance" ffs any further "improvements " & we'll be sprinting round our walks

As Nan says so aptly "What a load of old sh**"

[DirtyHarry]

Ed Davey is a complete cnut, so little wonder that he's a government minister.
Shares are not going to "improve" my performance, ever.
I'm not the sort of Briton who wanks himself silly over a poxy handful of shares that will in all likelihood amount to next to nothing, Davey you peerless berk.
I'm afraid all Tories should be in no doubt whatsoever, that in the event the RM is privatised, that's it, from then on it will just be a one-way street to the mediocrity beloved by all privateers, the postal service as everyone once knew it, will be finished.

[Dogs of War]

Many thanks true blue. Now I know why they want to sell. f***ing greedy government.

[bexhil palace]

Ed Davey; David i've got an idea for the sell off of RM tee hee. How about we tell the plebs that mail volumes are down, and the only way to save the company
is to sell it off to our friends abroad.
David cameron; Nice one Eddie my boy, those fools will believe anything we tell them after the last lot.
ED; Great shall we tell about DSA as well? that would seal the deal.
Dave; My god man are you an idiot? Feed them lies, lies, lies.not the truth.
Ed; You mean someone actually signed up for that, i thought is was a joke.


Well Eddie it is a f..king joke, but not for us Posties,we have been left with the remnents of this crap, and if you've got any bol..cks you will do something
about it, but i won't be holding my breath.

[DGP1]

How do they think they can get £9billion when they couldn't get £3billion last year for half the company

[heapsy]

A sell off will be used for 1 purpose only in my opinion, to cut the financial deficit of the entire country. When they do sell the standards of service will drop even further.

[taxi4leighton]

im a labour voter, but even they were willing to sell us off
it was them who hired Leighton and Crozier
gave them obscene wages and bonuses
encouraged massive closures of post offices
so what do we expect from this lot ?
every day they paint a darker and blacker picture of the British economy
softening the public, to the impending slashing cuts of public services and hikening of taxes
get prepared for a very bumpy road ahead