Fallon To Unveil £2.5bn Royal Mail Flotation

[TrueBlueTerrier]

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Business minister Michael Fallon to announce details of Royal Mail flotation in Commons statement this week, Sky News can reveal.

The Government will this week fire the formal starting-gun on the most ambitious privatisation in decades by unveiling plans for a £2.5bn autumn stock market listing of Royal Mail.

Sky News can exclusively reveal that Michael Fallon, the Business Minister, is expected to disclose the news in a statement to the House of Commons. The statement has been provisionally scheduled for Wednesday although the timing could still change, according to people close to the situation.

Mr Fallon’s announcement will end any lingering suggestions that the Government could abandon plans for a flotation of Royal Mail in the face of escalating public hostility from trade unions.

The Communication Workers’ Union rejected an 8.6pc basic pay rise offer – spread over three years – from the company’s management last week, a deal which Mr Fallon described as “pretty reasonable”.

It will also confirm the widely-held expectation that the Government wants to pursue a listing in which members of the public can participate, although there may be restrictions on the number of shares for which individuals can apply.

Mr Fallon had previously said the Coalition’s “preferred route” to injecting capital into Royal Mail was a stock market flotation but insisted that other options remained under consideration.

Last week, the Government hired three investment banks to add to an existing quartet of advisers that will work on the share sale. They are expected to earn up to £15m in total, a relatively small fee pool for such a sizeable listing.

It is unclear whether this week’s statement will include full details of the terms of an initial public offering (IPO), such as the mechanism through which Royal Mail’s 130,000 staff will receive shares in the company.

Sources said the Government was leaning towards the option of giving the equity to staff for free rather than at a discount.

However, Sky News understands that the employee share offer, which will take place over a period of some months, will only include those Royal Mail staff who are based in the UK.

Ministers and officials have been deliberating over whether the roughly 13,000 people who are employed by General Logistics Systems (GLS), Royal Mail’s European parcels business, should be involved in a staff share ownership scheme.

The Government has been sensitive to potential accusations that they are orchestrating a share giveaway worth hundreds of millions of pounds from which thousands of French, German and Italian citizens would stand to benefit.

GLS, which delivers more than 360 million parcels to 220,000 customers every year, is one of the most profitable parcel delivery businesses in the world. Its earnings have been one of few financial bright spots during the restructuring of Royal Mail during the last decade.

The company has staged a significant financial turnaround under the leadership of Donald Brydon, its chairman, and Moya Greene, the Canadian who was parachuted in to lead the restructuring in 2010.

Royal Mail’s annual report, which could also be published this week, is expected to show that she will receive an annual bonus worth almost £500,000 after nearly trebling the company’s operating profit to £403m last year.

The Department for Business, Innovation and Skills and Royal Mail both declined to comment.

[the deliverer]

Why does the union expect its members to stop privatisation, surely we can get to every household in the country by using a card which the public can leave at the local post office in a separate box for collection and return to our union reps. The card should ask a simple question. Do you want The Royal Mail to be privatised? Yes or No or Couldn't care less. All of us postman can add it to the D2Ds and the whole country can be hit all in the same week. Has this been considered? Obviously this would be too expensive to do as a reply paid card.

[Ahebban]

The Government has been sensitive to potential accusations that they are orchestrating a share giveaway worth hundreds of millions of pounds from which thousands of French, German and Italian citizens would stand to benefit.

Heaven forbid that the present government should make it any easier for foreign investors to 'buy-in' to UK PLC than has happened under previous governments

[lloydy]

Are these free shares going to end up the same value as our last free shares? what a deal lol

[Ahebban]

There are a whole range of options currently in place, and under consideration, to bring the privatization issues and likely impact of unfair competition on UK postal services to a wider audience. Each option has its own particular role to play in the overall scheme of things.

Postal workers will fight their own corner rest assured. It does no harm to ally yourself with other parties, vested interest or otherwise, to join the struggle in preventing full privatization leading to irreperable damage to UK postal services and Royal Mail in particular.

[mandelsons_toenail]

That's it then.

Free shares will turn many posties.

The £2000 of shares will be a juicy carrot, that the mole eyed bastards won't realise , is more than they will lose overnight, once we have our contracts torn up along with other accrued benefits we as a union have earned for everyone over the years.

5 years time we will be on £7.50 an hour with workhouse style conditions.

Watch this space

[Lounge Lizard]

Why does the union expect its members to stop privatisation, surely we can get to every household in the country by using a card which the public can leave at the local post office in a separate box for collection and return to our union reps. The card should ask a simple question. Do you want The Royal Mail to be privatised? Yes or No or Couldn't care less. All of us postman can add it to the D2Ds and the whole country can be hit all in the same week. Has this been considered? Obviously this would be too expensive to do as a reply paid card.

"surely we can get to every household in the country" except Peterborough

[zhk70@hotmail.com]

Royal mail can be bought by its own employees i.e., postman/woman. Each of 110,000 royal mail staff require to raise £23,000 to share the £2.5 bn flotation money. But Government can arrange this loan amount on behalf of employees and we can pay by instalments from our wages. It would be far better with employee partnership than private body. We will have better future at Royal Mail if it is in our hand. As partners our job will be secured and we can decide the remuneration for everyone reasonably. We can collectively make Royal Mail a profitable company and we can feel that we are working for ourselves not for other people. Do you support my view? any other opinion....

[db]

Royal mail can be bought by its own employees i.e., postman/woman. Each of 110,000 royal mail staff require to raise £23,000 to share the £2.5 bn flotation money. But Government can arrange this loan amount on behalf of employees and we can pay by instalments from our wages. It would be far better with employee partnership than private body. We will have better future at Royal Mail if it is in our hand. As partners our job will be secured and we can decide the remuneration for everyone reasonably. We can collectively make Royal Mail a profitable company and we can feel that we are working for ourselves not for other people. Do you support my view? any other opinion....

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