Private Investment

[Spedley]

One of the reasons RM was privatised was because of the 'need' for massive investment into modernisation of the business.

Has anyone seen any investment from any external source? All I can see so far is the continuing spending of RM profits on plans which were already in progress.

[Jefferson Starfish]

Why would it need to be from an external source? The profits are now spent on the business(not counting the dividends) instead of it all going to the government.

[Spedley]

Investment from the private sector was cited, no mention of stopping draining funds.

[TrueBlueTerrier]

Investment from the private sector was cited, no mention of stopping draining funds.

Investment from the private sector is code for being able to borrow money, and the value and health of shares have a direct effect on RMs (or any company) to borrow on the open market. As a fully owned Government business, they couldn't borrow the same sums, and it took forever to get authorisation for any sort of capital investment. (Captial financing)

Also, there is nothing stopping Royal mail selling more shares, the price of them will drop, but unless RM actually holds any, if won't affect the company directly, in fact, it will make them money when they sell the extra shares. (Equity Financing)

Also if RM sees a chance of taking over a smaller company or competitor then Instead of having to buy it with cash, the company may simply issue more shares to fund the takeover. In strong markets, this is extremely common - so much that a strong stock price is a matter of survival in competitive industries.

[Spedley]

I go along with that TBT. Do we know of any money we have borrowed? The government gave the impression it would take Billions of 'investment' but I still don't see anything that wasn't already being done.