Cable confirms Govt’s Royal Mail stake sale

Vince-Cable-2009-700x450.jpg

The coalition has confirmed plans to sell off a majority stake in Royal Mail Group by floating it on the London Stock Exchange in the current financial year.

The partial sale of Royal Mail has been labelled as the UK’s most ambitious privatisation in two decades, with expectations that the group will be valued at £2bn to £3bn. The size of the stake set to sold has not yet been confirmed by the government.

As part of the coalition’s plan, Business Secretary Vince Cable also confirmed that members of the public will be able to buy shares in a retail offering.

Cable says the government plans to “retain flexibility around the size of the stake to be sold”, with the final decision influenced by investor demand as well as market conditions in an attempt to ensure value for money for the taxpayer.

However Labour has declared the privatisation a “fire sale”, arguing that it is not in the interest of the taxpayers, consumers and the small businesses who rely on Royal Mail services.

The flotation of Royal Mail will also create the largest employee share scheme of any major UK privatisation for nearly 30 years.

As part of the initial public offering Cable confirmed that Royal Mail’s 150,000 employees based in the UK will be eligible to a 10 per cent free stake.

Goldman Sachs, UBS, Barclays and Bank of America Merrill Lynch have been appointed the lead banks on the flotation. They will also be supported by Investec, Nomura and RBC.