Business World

Tuesday 6 December 2016

Royal Mail remaining stake worth about £1.5bn to be sold off

Published 04/06/2015 | 13:34

A Royal Mail Group Ltd. employee carries a bundle of letters during his delivery round in London
A Royal Mail Group Ltd. employee carries a bundle of letters during his delivery round in London

UK Chancellor George Osborne has announced plans to sell off the Government's remaining stake in Royal Mail as he set out proposals for cutting departmental spending by £3bn (€4bn) this year.

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The Chancellor said he would begin selling the 30pc holding - worth around £1.5bn - this year.

He told MPs: "I am today announcing that the Government will begin selling the remaining 30pc shareholding we have in the Royal Mail.

"It is the right thing to do for the Royal Mail, the businesses and families who depend on it - and crucially for the taxpayer."

Osborne is due to announce a new budget and fiscal targets on July 8 after his Conservative Party won a parliamentary majority in a national election in May. He said in March he was aiming to wipe out Britain's budget deficit by 2018/19.

Britain sold a 60 percent stake in Royal Mail in 2013, attracting criticism at the time from rival politicians and trade unions who said the firm had been sold off too cheaply after shares rose by as much as 87 percent following the sale.

Osborne appeared to acknowledge those concerns as he made his announcement in parliament. "We will only sell our stake when we can be sure we are getting value for money," he said.

The shares were down 3 percent on the news on Thursday.

No decision has yet been taken on whether the shares would be sold privately to investors or to the public, a Treasury official said.

The sale of further Royal Mail shares will begin this year, the finance ministry added.

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