Royal Mail Rescue Package

£1.8bn Royal Mail rescue package outlined
The Government has issued further details of the £1.8 billion package that will fund an emergency restructuring of the Royal Mail.
Trade Secretary Patricia Hewitt first announced the move last June as the company announced a £1.1 billion pre-tax loss and thousands of job losses.
The money has been drawn from Royal Mail profits and reserves previously taken by the Treasury and will also be used to halt post office closures.
Trade Minister Stephen Timms said £1 billion will be made available through £544 million of loans from the National Loans Fund, secured on Royal Mail cash deposits, and two DTI bonds, of £200 million and £300 million, secured against the firm’s assets.
He said the loan and bonds would be provided on commercial terms and be repayable between 2007 and 2008 and the bonds would require Parliamentary approval.
Mr Timms also said the network of post offices would also be boosted by using the money to repay £420 million of loans from the Royal Mail Group to Post Office Limited and meet other costs of up to £570 million over the next five years.
The details were disclosed in a written statement – provoking anger that Ms Hewitt had not announced them to MPs in the chamber where she was answering questions this morning.