Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Britain to part-privatise Royal Mail in stock market float  Join our daily free Newsletter

MENAFN - AFP - 10/07/2013
No. of Ratings : 0
Add to Mixx!



(MENAFN - AFP) Britain on Wednesday announced plans to privatise more than half of Royal Mail, the state-run postal delivery service, following a major restructuring in recent years triggered by fierce competition from email.

Business Secretary Vince Cable confirmed to parliament that the coalition government planned to "dispose of a majority stake" via a flotation on the London Stock Exchange, with 10 percent of Royal Mail shares handed out to its employees for free.

Royal Mail was expected to be the biggest privatisation since the unprecedented sell-offs in the 1980s such as British Gas and British Telecom.

Cable, a member of the Liberal Democrats which share power with Prime Minister David Cameron's Conservatives, said the government would seek an initial public offering (IPO) by the end of the current financial year that ends next March.

"This is logical, it is a commercial decision designed to put Royal Mail's future onto a long term sustainable basis," Cable told parliament.

"It is consistent with developments elsewhere in Europe where privatised operators in Austria, Germany and Belgium produce profit margins far higher than the Royal Mail but have continued to provide high quality and expanding services."

He argued that partial privatisation would allow Royal Mail the freedom to raise capital, continue modernising and meet booming demand for online shopping delivery.

Cable added it would also help "secure the universal postal service -- the six-day-week service, at uniform and affordable prices to all 29 million addresses in the UK, which is vital to the UK economy".

Around 150,000 staff would be eligible to get a free stake in the business under Britain's largest employee share scheme of any major UK privatisation for almost 30 years, he said.

However, the Communication Workers Union (CWU) responded that it would explore strike action unless a deal on employee terms anconditions could be agreed with the eventual new owners.

"I really do not understand what the government are trying to achieve by this," said CWU deputy leader Dave Ward.

"If you think about the profits the Royal Mail are now making, there's no need for it to be privatised. What privatisation will do is destroy the UK's universal postal service.

"There's no way private companies can maintain six-day-a-week deliveries to every single address in the UK."

Reports suggest that the government plans to keep a 49-percent holding, while Cable stressed that the government would "retain flexibility" around the size of stake to be sold.

Royal Mail has recently enjoyed a surge in annual profits thanks to the increasing popularity of online shopping which generates parcel traffic, and owing also to deep cost-cutting and big increases in stamp prices.

Media reports say the part sale of Royal Mail could worth up to 3.0 billion (4.5 billion, 3.5 billion euros). The government previously said that it would take on Royal Mail's historic pension deficit.

The coalition government relaunched plans to part-privatise Royal Mail three years ago and after the proposal was ditched by the former Labour administration.

Former prime minister Gordon Brown's Labour government scrapped the sell-off plans in 2009 as Britain struggled with recession following the global financial crisis.

But Royal Mail recently announced that its profit after tax soared to 566 million in 2012-13 compared with a net gain of 149 million during its previous financial year. Revenue grew almost 6.0 percent to 9.279 billion.

Royal Mail continues to operate most British postal services even though its more than 350-year-long monopoly of the letter-delivery business ended in 2006 as new rules kicked in to allow rival operators.

While Brown's Labour government was seeking to offload a big chunk of the Royal Mail, it was also forced to nationalise or rescue several major British banks at the top of the global financial crisis in 2008.


 


AFP




  MENA News Headlines
 Jul 28 2016 - UAE, China arrange for extensive mutual projectsMENAFN
(MENAFN) The UAE and China have created a united strategic investment fund worth a whopping USD10 billion as the 2nd largest economy chases its ambition to reestablish Silk Road trade routes.The ...

 Jul 28 2016 - Oman, Iran agree to invest jointly in mining industryMENAFN
(MENAFN) Oman and Iran have revealed recently great interest in cooperating as they have great potentials to further grow joint collaboration in the mining sector.In accordance, both nations intend ...

 Jul 28 2016 - Saudi sees robust retail construction boom in H1MENAFN
(MENAFN) Saudi Arabia has been seeing a retail building explosion even as oil, the kingdom's dominant source of revenue, severely plunges, based on reports.Overseas and local firms are betting ...

 Jul 28 2016 - Bahrain to apply crucial investments worth over USD30bMENAFN
(MENAFN) Bahrain has been recently applying a comprehensive well-studied program of structural economic and fiscal reforms to further strengthen its long-term development, according to the available ...

 Jul 28 2016 - The Lubricant Market in South Africa has been Expected to Reach USD 1.8 Billion by 2020: Ken ResearchMENAFN Press
(MENAFN Press) Ken Research announced its latest publication on "South Africa Lubricant Market Outlook to 2020 - Inclining Vehicle Sales and Growing Manufacturing and Mining Sector to Drive Future ...

 Jul 28 2016 - Kuwait offers aid to Rwanda without hesitationMENAFN
(MENAFN) A loan contract has been inked between the Republic of Rwanda and the Kuwait Fund for Arab Economic Development (KFAED), according to the released reports.The loan stands at USD15.3 million, ...

 Jul 28 2016 - Dubaiprint.com opens the 1st premium print lounge at Dubai Design District (d3)MENAFN Press
(MENAFN Press) Dubaiprint.com, competency of NDIGITEC and the first professionally integrated web-to-print with a customized unique platform for professional and personal users in the Middle East, ...

 Jul 28 2016 - Bahrain seeks massive cuts in spending to lift economyMENAFN
(MENAFN) Bahrain has approved a proposed strategy to reduce government expenditures by 30 percent and improve efficiency across all entities, based on recent reports.The proposed plan is in line with ...

 Jul 28 2016 - Kuwait- MoH announces work timings of all clinics during RamadanArab Times
(MENAFN - Arab Times) KUWAIT CITY, June 7: Director of Primary Health Department at Ministry of Health Dr Rehab Al-Watyan has declared the work timings of all clinics throughout Kuwait during the ...

 Jul 28 2016 - Kuwait- MP praises action on fake degreesArab Times
(MENAFN - Arab Times) KUWAIT CITY, July 24: MP Kamel Al-Awadhi praised the actions taken by Minister of Education Dr Bader Al-Essa against those who hold fake academic certificates as he not only ...

more...


 





Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help