Tag: Royal Mail

Royal Mail today announced the appointment of Stephen Agar, currently the Group’s Regulatory Affairs Director, as Director of its Wholesale arm, which deals with letters which are collected and sorted by Royal Mail’s competitors before being handed to Royal Mail for final mile delivery. Mr Agar will report to Ian Griffiths, the Managing Director of Royal Mail Letters, who joins the company early in 2006.

The 200,000 workers at Royal Mail will each receive one share worth up to Pounds 2,500 if the government-owned body is part-privatised. Allan Leighton, Royal Mail’s chairman, is pressing the Department of Trade and Industry to support a plan to give 20% of the group’s shares to staff. This stake would be worth Pounds 400m – 500m and put an effective value on Royal Mail of almost Pounds 2.5 billion. The share sale is part of a complex Pounds 2 billion fundraising that Leighton is pursuing. The proceeds will be used to reduce the size of the group’s huge pension deficit, which has swollen to Pounds 4.2 billion, and to fund investment – particularly for automated equipment. Royal Mail has retained Morgan Stanley, the investment bank, to advise on the fundraising, and a document will be sent to the government in the next six weeks.

CSFB, the US investment bank, has emerged as frontrunner to advise the Department of Trade and Industry over a financial restructuring of the cash-strapped Royal Mail. Executives at the postal group are planning to lodge their proposals for a pounds 2 billion rights issue with the bank before Christmas.
Although a rights issue is not the only option being proposed to resolve the postal group’s funding problems, “it is the blindingly obvious first choice,” a source said. Under the restructuring, the Government would take an increased stake in Royal Mail in return for providing more funds, with 20pc of the shares allocated to employees. The organisation hopes to have a deal in place by the end of February, when the new regulatory settlement is due to begin.