UK mail chief to urge employee buyout
Allan Leighton, Royal Mail chairman, is expected to begin pushing next week for a partial privatisation of the national postal operator through an employee buyout.
The proposal, which would enable Royal Mail to borrow an extra Pounds 2bn against its balance sheet, will test the government’s manifesto pledge that there were “no plans to privatise” the postal group.
Royal Mail officials said yesterday there was enough “wiggle room” in the government’s position to allow the John Lewis-style plan of employee ownership to be implemented. The man who will ultimately decide whether the scheme could go ahead is Alan Johnson, a former postman and the new secretary of productivity, energy and industry.
The Communication Workers’ Union opposes privatisation but Mr Leighton believes that he can gain the workers’ support because they will be receiving shares in the business. Jonathan Moules
UK’s Royal Mail seeks privatisation to allow staff to own stake – report
AFX UK Focus 05-09-2005
Royal Mail executives have held preliminary talks with the government over a proposal to turn the organisation into a commercial operation, in which employees own shares and receive dividends, the Times newspaper reported, without citing sources.
The proposal could result in as much as 2 bln stg being reinvested in the Royal Mail. However, it is expected to face vehement opposition from unions, which have vowed to oppose any push towards privatisation, the newspaper said.
It was one of the options being explored by Royal Mail, headed by chairman Allan Leighton, to raise funds to ensure that it is able to compete with rivals when the postal market is deregulated next year.
The Labour government, in its election manifesto, said it would not privatise Royal Mail and would review the impact market liberalisaton has had on the struggling UK postal service.
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