Latest Update: Royal Mail Privatisation ‘In The Coming Weeks’
The government has given formal notice to the stock exchange that it plans to privatise the Royal Mail “in the coming weeks”.
It has not decided exactly how much of the service it will sell, but has said it will be the majority.
Employees will be given 10% of the shares, with the rest being offered to institutional investors and members of the public.
The minimum amount members of the public can apply for will be £750.
Free shares will be given to 150,000 UK-based Royal Mail employees, who will be able to apply for additional shares under an employee priority offer, with a minimum application of £500.
The Communication Workers Union (CWU) opposes the float and is about to ballot its members for strike action. The outcome of the ballot will be announced on 3 October.
Royal Mail expects CWU members to vote for industrial action, with the first date available for a strike being 10 October.
The government says it will decide how much of the Royal Mail to sell depending on market conditions and how much demand there is for the shares.
Private investors will also be able to apply for shares by post or through stockbrokers.
Royal Mail has announced that “in the absence of unforeseen circumstances” it will pay a dividend of £133m in July 2014.
As part of the privatisation, Royal Mail will take on £600m of loans from banks, with another £800m available if necessary. This will replace the loans it currently has from the government.
The Post Office was separated from Royal Mail in 2012 and is not for sale.
Business Secretary Vince Cable said: “HM Government is taking action to secure a healthy future for the company.”
“These measures will help ensure the long term sustainability of the six days a week, one-price-goes-anywhere universal postal service.”