Tag: UK

CSFB in the frame to advise on UK Royal Mail restructuring

Posted by | Dec 10, 2005 | |

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.

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Postcomm admits ‘cave in’ over UK Royal Mail price deal

Posted by | Dec 9, 2005 | |

Postcomm has bowed to pressure from Royal Mail over its price control proposals, admitting that the revised price regime “could signal we’ve caved in”. The new proposals have sparked a backlash from watchdog Postwatch, which claims they are over generous to Royal Mail. The postal operator refutes this, claiming the proposals are still ‘tough’. The regulator had originally proposed capping Royal Mail’s prices at 2.5 per cent below inflation but Royal Mail has managed to convince Postcomm to give it a limit of only 0.1 per cent below inflation. The maximum cost of a first-class stamp will now be 36p (a 20 per cent increase). It can also put up the price of products that are open to competition by 0.6 per cent, and the price of products without effective competition by 5.5 per cent. Millie Banerjee, chair of Postwatch comments: “This is well in excess of inflation.”

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DTI in talks over GBP 2bn UK Royal Mail investment

Posted by | Dec 9, 2005 | |

Royal Mail could be in line for a GBP 2 billion cash injection if talks between the Department of Trade and Industry and a number of banks are successful.

The DTI was today reported to be in discussions with HSBC, Lazard and Merrill Lynch about the possibility of mounting a rights issue at Royal Mail, which would give the Government more shares in the postal group in return for the investment.

Although the Government is the sole shareholder in Royal Mail, it has only half of the 100,000 shares created when the group became a publicly-owned company five years ago.

Royal Mail kept 50,000 shares but can only allocate them to the Government. The Trade and Industry Secretary received 49,999 shares, while the Treasury solicitor holds both the remaining shares and a separate special share.

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All-party call for definitive stamps rejected by UK Royal Mail

Posted by | Dec 9, 2005 | |

The Royal Mail has rejected an all-party call for Scottish stamps already issued to be made available in easy-to-buy books in retail shops.

A spokesman said the cost of issuing 1st and 2nd class Scottish stamps in book form would be “prohibitive” at a time Royal Mail faces competition with door-to-door deliveries in the new year.

The proposal was spelled out in a motion put down by Scottish Liberal Democrat spokesman John Thurso, MP for Caithness, Sutherland and Easter Ross, with the support of Aberdeen North Labour MP Frank Doran, SNP chief whip Pete Wishart, MP for Perth and North Perthshire, and sole Scottish Tory David Mundell, MP for Dumfriesshire, Clydesdale and Tweeddale.

It congratulated the Royal Mail on issuing country definitive stamps but noted “with concern” that in Scotland they are not available for sale in retail outlets, even in tourist centres, and that there is little public awareness of their availability.

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An Post collection staff vote by two-to-one for new deal

Posted by | Dec 9, 2005 | |

Collection and delivery workers at An Post have voted by almost two-to-one to accept a Labour Court recommendation on major changes to their work practices.

The vote by members of the Communications Workers’ Union (CWU) should bring to an end the long-running dispute at the company, which appeared at times to threaten its future.

It also means that more than 8,000 staff in An Post, as well as the company’s pensioners, will receive a pay increase next week of just over 5 per cent due to them under Sustaining Progress.

About 4,500 collection and delivery staff were eligible to vote in the ballot, which concluded yesterday morning.

Despite strong opposition to the recommendation by many postal workers in Dublin in particular, 2,932 union members voted for the deal. It was opposed by 1,486, with seven votes spoiled.

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