Royal Mail could be packaged up for 4bn flotation

[POSTMAN]

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A stockmarket listing has emerged as a favourite option for the privatisation of Royal Mail following the state-bail out of its pension scheme that was confirmed by the Chancellor in the Budget.
Last week George Osborne said the European Union had given approval for the transfer of £28bn of assets from the Royal Mail pension fund to the Exchequer. By also taking on the £9.5bn pension deficit, the move cleared away a big obstacle to the plans to privatise the company.
A London listing would depend on market conditions given it would be one of the biggest flotations in recent times. The Government will keep the options open for a sale to a trade buyer or a private equity investor. Royal Mail employees are expected to be offered 10pc of the shares.
The Coalition has already passed the necessary legislation to float the company but a listing could take more than 18 months to prepare. Last night Royal Mail and the Department of Business declined to comment.
In an interview with The Daily Telegraph last year, Ed Davey, the Postal Affairs Minister, said he was considering a full-scale privatisation as one of the options to raise money quickly for the debt-laden company

The Liberal Democrat minister said fresh investment was urgently needed to keep Royal Mail from perishing from a "lethal combination" of a sharp fall in revenue from the declining number of letters and parcels being sent, as well as its pension debts.
Mr Davey said under the plans, Royal Mail, which runs the postal delivery, would be privatised. The Post Office, which runs the 12,000 branches across the country, would remain in government hands.
Mr Davey said: "The truth is that Royal Mail's situation, if nothing is done, will become increasingly dire. 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."

[POSTMAN]

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Royal Mail to deliver IPO in 2013


The coalition government aims to begin the privatisation of Royal Mail by selling or floating at least part of it in autumn 2013 if the state-owned postal operator’s finances continue to improve.
The sell-off would be Britain’s most ambitious privatisation since John Major broke up and sold the railways in the 1990s. Analysts think Royal Mail could be worth up to £3bn-£4bn.


The government is attracted to a stock market flotation if the financial climate for initial public offerings improves, according to people close to the sale process. Options are also open for a sale to an industry or private equity buyer.

A flotation is likely to involve a sale of shares to the public as well as institutions, backed by a marketing effort like the 1986 “Tell Sid” campaign to sell British Gas.
“We see no reason why this company should not be IPO-able,” said one senior insider. “Royal Mail is viewed with a high level of affection by the public. That could easily play well into an IPO situation.”

Privatisation is likely to begin with a partial sell-off, with the rest sold later, but a full sale at the outset is not ruled out. Royal Mail employees would get a stake of at least 10 per cent when privatisation is completed. The Post Office network would remain in the public sector and may be mutualised.
The coalition has passed legislation to privatise Royal Mail, which previous efforts by Conservative and Labour governments failed to achieve over the past 20 years. But the company is losing letters traffic heavily to email and social media.

An important step was achieved last week when the European Commission approved the government taking over Royal Mail’s £9.5bn pension deficit and writing off £1bn of its £1.7bn debt.

In the next few days Ofcom, the communications regulator, is expected to confirm a shift to a lighter-touch regulatory regime that will boost Royal Mail’s prospects by freeing it to set prices for the majority of its products.

Ofcom has been consulting on capped increases of up to 50 per cent on second-class stamps and limitless price rises for first-class.
Royal Mail has accelerated its drive to introduce new technology and modernise working practices, but government insiders believe it will need to demonstrate a year of financial progress under the new regulatory regime before investors can be persuaded to buy shares.

Royal Mail, which has a £9bn turnover, needs to improve its profit margins and demonstrate strength in packets and parcels.
Operating profit for the six months to September 2011 rose from £22m to £67m, but that was entirely due to the contribution of its GLS European parcels arm and the Post Office business. The letters and parcels delivery business cut its loss from £55m to £41m.

[BELIAL]

These people are incredible ,no shame;no morals, they engineer a crisis and then claim to be the knight in shining armour .

[Lounge Lizard]

"The coalition government aims to begin the privatisation of Royal Mail by selling or floating at least part of it in autumn 2013 if the state-owned postal operator’s finances continue to improve." - so what's the incentive for us all to keep helping Royal Mail's finances to continue to improve ?

[TrueBlueTerrier]

"The coalition government aims to begin the privatisation of Royal Mail by selling or floating at least part of it in autumn 2013 if the state-owned postal operator’s finances continue to improve." - so what's the incentive for us all to keep helping Royal Mail's finances to continue to improve ?

Apparently the carrot is we will get a minimum of 10% of the shares.

However, as far as know no details have yet been released on how we are going to get them, whether we can sell them immediately, how we can sell them, if we can sell them, if they will give us any rights......................

Yadda yadda, basically it smoke and mirrors - the Government and Board will release information which makes it look like a good idea and suppress or ridicule any concerns of the workers or opponents. My forecast is we won't know the value, disposal options or rules until probably 1 or 2 months before the issue.

[bwfcmaddog]

"The coalition government aims to begin the privatisation of Royal Mail by selling or floating at least part of it in autumn 2013 if the state-owned postal operator’s finances continue to improve." - so what's the incentive for us all to keep helping Royal Mail's finances to continue to improve ?

Apparently the carrot is we will get a minimum of 10% of the shares.

However, as far as know no details have yet been released on how we are going to get them, whether we can sell them immediately, how we can sell them, if we can sell them, if they will give us any rights......................

Yadda yadda, basically it smoke and mirrors - the Government and Board will release information which makes it look like a good idea and suppress or ridicule any concerns of the workers or opponents. My forecast is we won't know the value, disposal options or rules until probably 1 or 2 months before the issue.

and can they change our pay and conditions once the sell off is complete

[Lounge Lizard]

"The coalition government aims to begin the privatisation of Royal Mail by selling or floating at least part of it in autumn 2013 if the state-owned postal operator’s finances continue to improve." - so what's the incentive for us all to keep helping Royal Mail's finances to continue to improve ?

Apparently the carrot is we will get a minimum of 10% of the shares.

However, as far as know no details have yet been released on how we are going to get them, whether we can sell them immediately, how we can sell them, if we can sell them, if they will give us any rights......................

Yadda yadda, basically it smoke and mirrors - the Government and Board will release information which makes it look like a good idea and suppress or ridicule any concerns of the workers or opponents. My forecast is we won't know the value, disposal options or rules until probably 1 or 2 months before the issue.

So that's about £2,500 each assuming they get the £4 billion, but not much of a carrot given the Colleague Share fiasco so clearly still being in our minds.

[oypostie]

Don't think you'll find we'll be getting the shares for nothing. I think you'll find that the 10% will be the shares generously set aside for us to buy

[Lounge Lizard]

Don't think you'll find we'll be getting the shares for nothing. I think you'll find that the 10% will be the shares generously set aside for us to buy

- and do they seriously think they woul get many takers ?