Well it's a nice story but it is again only you speculating on what will happen. In your scenario is RM really losing money on the USO or just saying they are in order to boost profitability? Does the Govt just take RM's word for it or is there any burden of proof? Assuming RM is really losing money on the USO what are the options for resolving it? What conditions might the regulator attach? Is it certain that none of our competitors will be in a position to provide at least part of the USO service (there is nothing to say that it has to be done by a single company).UnhappyGremlin wrote:I'm not accidentally conflating anything. Again you are interpreting everything to suit yourself, and your arguments (as am I).Brain Fury wrote:Well you say ...UnhappyGremlin wrote:Talking crap again.Brain Fury wrote:As you know, no owner of RM can unilaterally "get rid of the USO". The USO is enshrined in law and can only be changed by primary legislation. The Government doesn't need to retain any share of RM to influence the owner because it has a regulator to do this. Any refusal by a privatised RM to meet the obligations of the USO would be met by action by the regulator - probably fines which would hit shareholders in the pocket. Re-nationalisation wouldn't come into it.UnhappyGremlin wrote:As far as I'm aware, the Government intends to retain a minority holding, meaning they will offload a minimum 41%.
I believe they have also already said there will be a further issue in the following 12 to 18 months, if the IPO goes as planned (they believe it will be a huge success).
The 10% in employees hands would be irrelevant. If, after another sale in the future, any single company or group gets hold of 51%, they control it, and can do as they wish.
If it comes down to a vote, the majority shareholder would always win.
It wouldn't matter if the Government kept 39%, they may try and influence any majority shareholder, but it would ultimately be whoever has the controlling interest, that would and could make any choice they see fit.
The only issue would be that, if they tried to get rid of the USO, the Government could threaten them with re-nationalisation to prevent this, but then, the Government could do this anyway. Question is, would they?
I think not.
If any one group or person gets to a particular level of shareholding, I believe 90%, then they are required (by law?) to make an offer to buy up the remainder of the shares, and can de-list from the FTSE.
Reading between the lines again. Adding 2 and 2 and coming up with 5.
Laws can be changed. I never, at any point, mentioned any kind of unilateral action, by any company or owner.
Never said the Government NEEDED to retain a share to influence the company. It is YOUR OPINION that re-nationalisation wouldn't come into it. I used it as an example of how the Government COULD force any new owner to comply with the USO.
The USO will go in my opinion. At some point, if privatised, the board or any new owner/majority shareholder would, over a period of time, put pressure on the regulator and try and gain Government influence should they retain a stake long term, to reduce the USO terms to a more favourable stance, and remove it totally in time. It may be a long process, but it will happen. It is one the areas where cuts can be made for profits to be increased.
The USO is up for renewal in 2021. The new board will use that fact nearer the time (if have not tried long before then) to get concessions. Who else could take on the USO licence? No one.
They will get the terms reduced, and I think removed totally in time.
They'll claim unsustainability, costing too much, unfair on them when these rules aren't put on other carriers.
Even if terms remain the same, they'll ask for subsidies. Which I also believe is inevitable in time.
Remember, Royal Mail ownership was 'enshrined in law', until a couple of years ago, it would have been impossible to contemplate selling it. Now it isn't. And it also isn't JUST a Government decision to sell it. There are many outside influences at work here, and I don't just mean the EU. There are big businesses and wealthy people pushing for this, all mates with people in Government.
" ... any single company or group gets hold of 51%, they control it, and can do as they wish. If it comes down to a vote, the majority shareholder would always win.
It wouldn't matter if the Government kept 39%, they may try and influence any majority shareholder, but it would ultimately be whoever has the controlling interest, that would and could make any choice they see fit. The only issue would be that, if they tried to get rid of the USO, the Government could threaten them with re-nationalisation to prevent this, but then, the Government could do this anyway. Question is, would they? I think not."
Perhaps you are just "accidentally" conflating the issue of control of RM as a company with the ability to change the USO but they are your words saying that a majority RM shareholder "can do as they wish" and the Government could threaten re-nationalisation (although you think they wouldn't) if RM "tried to get rid of the USO". So what happens then? Does the USO change or stay the same simply because RM wants it to and the Government won't renationalise? Neither RM wishes or the Government's attitude to re-nationalisation will cause the USO to change.
If the Government wants the USO to stay the same then it stays the same. It doesn't need to "threaten" RM with anything because it's the law. RM can "claim" anything it likes but the USO will only change if parliament (not the Government) agrees by passing primary legislation. Given the number of MPs that are supposed to oppose privatisation I am surprised that you believe that such legislation would definitely be passed. I am sure you also know that the review of the USO in 2021 is a review of whether RM remains the designated provider of the service not what the USO itself is.
I realise that your gloomy predictions for the USO etc are only opinions of what will happen. Of course these suit your wider anti-privatisation stance because they play to the legitimate concerns of people who might be affected by a change in the USO. I don't know what will happen to the USO or when and neither does anybody else. What I do know are the facts about what needs to happen for the USO to be changed and that it is in the control of the UK Parliament and nobody else.
The USO is different to most normal business decisions. Everything that is separate to the USO will be changed at will by any owner, of that I have no doubt.
When it comes to the USO, I firmly believe that, over time, the new owner would chip away at it citing unsustainability. It would take time, but I believe they'd get their way.
If the Government wants the USO to stay the same, it will?
Don't think so. Any private owner that sees their profitability going down the drain, would ask for subsidies. The Government would say no, and compromise. They wouldn't want the privatised company to fail, or be seen to be failing, as most of the public would view it as proof that the privatisation was wrong in the first place.
I also think that, when reviewed, any new owner would ask for terms to be relaxed, and if refused, would respond by telling the Government to issue the USO licence to someone else. Knowing full well, there is no one else that CAN provide it. No other company can possibly expand to fulfil that role between now and then. So while, as you say, it is only a review to designate WHO provides the USO, there is really only one option. Placing all the bargaining chips in one corner, making a reduction of the terms inevitable.
The thing is I don't really have an axe to grind - I don't care if RM is privatised or not. Either way I think it will have a very difficult future and the relationship between management and union is a much bigger risk to it's future than the question of ownership. The thing I generally find myself doing on this board is acting as devil's advocate to point out some of the facts e.g. that only the UK Parliament can amend the USO or to suggest an alternative view that might counterbalance some of the uninformed, mendacious or wildly speculative opinions.
