British govt to bail out Royal Mail with 2 bln stg lifeline
The British government has agreed to inject 2 bln stg into Royal Mail, securing the future of the monopoly operator of the country’s household postal delivery service, the Financial Mail on Sunday reported.
The paper, citing an unnamed company source, said finance minister Gordon Brown had approved a deal to subscribe for new shares in Royal Mail.
The funds will be used partly to plug a 4.5 bln stg pension fund deficit.
Stamp prices will also be raised in order to help pay for an extra 2 bln stg of investment in new equipment.
Royal Mail chairman Allan Leighton last week warned the company had no way of filling its pension deficit without government help.
rhb/ma
