Royal Mail to get £1bn lifeline

Royal Mail, the cash-strapped postal operator, will be receiving more than Pounds 1bn of debt from the government, the Department of Trade and Industry confirmed yesterday. The cash, drawn from the Pounds 1.8bn of gilts – the accumulated cash generated by the business – on the balance sheet of the company would “enable the mails business to implement its renewal plan, and to support the nationwide network of post offices”, the DTI told parliament.

More than half the money will be drawn from the National Loans Fund, secured on cash deposits from Royal Mail, and will be leant to the company on commercial terms, repayable between 2007 and 2009. Marianne Brun-Rovet