UK government to sell remaining 30% stake in Royal Mail
The Chancellor of the Exchequer George Osborne has announced that UK government’s remaining 30% stake in Royal Mail is to be sold off. The chancellor said the shares – currently valued at around £1.5 billion – would help to reduce the budget deficit.
Royal Mail was part-privatised through an initial public offering (IPO) in October 2013. Shares accounting for 60% of the company were sold in the flotation; a further 10% of stock was given to the employees; and the government retained a 30% stake.
Osborne told MPs: “I am today announcing that the Government will begin selling the remaining 30% shareholding we have in the Royal Mail.
“It is the right thing to do for the Royal Mail, the businesses and families who depend on it – and crucially for the taxpayer.”
Sources report that the Government has appointed Rothschild to advise the Department for Business on the sale of the remaining Royal Mail stake, and the Chancellor insisted that the government would achieve “best value” from the sell-off. The part-privatisation in 2013 sparked considerable controversy, with critic’s claiming that the shares had been undervalued.
Royal Mail announced last month that results for the 12 months up to 29 March showed underlying group revenue up 1% to £9.42bn, but pre-tax profits were down 35% compared to the same period a year ago, to £421m. Yesterday the company named its next chairman as Peter Long, who is currently the joint CEO of travel and tourism giant TUI AG. Long has been appointed to the Royal Mail board as a non-executive director, and is expected to take over from current chairman Donald Brydon at the start of September.
