‘No plans to privatise UK Royal Mail’ says government

Suggestions that the Royal Mail could be privatised have been dismissed by the Government.

The denial followed a report that some of the City’s biggest investment banks had approached the Government in a bid to take the company private in the next year to 18 months.

It was reported in the Financial Mail on Sunday that Richard Gillingwater, head of the Shareholder Executive which advises Whitehall on its role as owner of Royal Mail, discussed the possible sale with top City bankers.

A spokesman for the Department of Trade and Industry said: “We haven’t got any plans to privatise it.”

According to today’s report Royal Mail’s recent transformation sets the stage for a flotation that could earn the Treasury billions of pounds.

A sizeable minority of shares in the group would be offered to the company’s 160,000 employees, it added.

Royal Mail is currently more than half way through a three-year restructuring plan that has seen it overhaul the way it sorts, delivers and transports mail.

In the year to March 31 of 2003 the company halved its losses to £611 million from £1.1 billion previously.

And in November it revealed it had made a £3 million profit in the first half of this financial year – the first time in five years it had been in the black at that stage of the year.

The group is expected to report operating profits of around £200 million when it reports figures for the year to March 31 later this month.

A spokeswoman for Royal Mail would not comment on today’s report.

She said: “All we are focusing on at the moment is trying to turn the business round and get it ready for competition.”

Last week Royal Mail launched disciplinary investigations against a number of postal workers following a TV programme which claimed to show theft and fraud in the organisation.

Chief executive Adam Crozier said he would not hesitate to take appropriate action, including sacking workers, if any wrongdoing was proved.

But he said the Channel Four Despatches programme did not fairly or accurately portray the behaviour of most postal workers.