New move over Royal Mail sell-off
Published 29/04/2013 | 18:11
The Government is to start tendering in the next few days for a syndicate of banks to advise on a possible flotation of the Royal Mail.
Business Minister Michael Fallon announced the move as he voiced hopes that global advisers on a sell-off will be appointed at the end of May.
Mr Fallon said ministers did not want to be tied to a specific type of sale or deadline for the sell-off, adding that the Government was attracted to an Initial Public Offering (IPO) as the preferred option.
In a speech to the Policy Exchange, he said all options for the privatisation remained on the table, and no final decisions have been made.
Mr Fallon said he will continue to encourage the Communication Workers Union (CWU) to hold talks over the structure of an employee share scheme.
The union is opposed to the sell-off, warning that jobs, terms and conditions and services will suffer, especially deliveries to rural areas.
Mr Fallon said: "Unless Royal Mail has the capability in the future to access equity markets, every £1 that it borrows is another £1 on the national debt.
"That means growing the national debt. No responsible party could propose that in the current environment or for that matter in any environment when Royal Mail, run on a fully commercial basis, has the capacity to be cash generative, profitable and perfectly able to raise the capital it needs from the private sector.
"A change of ownership in Royal Mail will not mean that Royal Mail can stop delivering to rural areas. Royal Mail will remain the UK's designated universal postal service provider and must continue to provide a six day-a-week service throughout the UK."
Mr Fallon said the Government will make a commercial decision, not one based on ideology.