The Secretary of State for Business, Innovation and Skills and President of the Board of Trade (Sajid Javid)
The Government have sold half of the 30% stake they retained in Royal Mail plc, at a price of 500p per share.
The sale has raised £750 million, which will be used to reduce public debt.
Following independent financial advice, the Government decided that yesterday was a good opportunity to realise value for money from a sale of part of their remaining shareholding in Royal Mail. The shares were sold through an accelerated bookbuild process which enabled the Government to take advantage of the current favourable market conditions. The sale was launched yesterday after the financial markets closed.
Royal Mail has demonstrated that it can thrive in the private sector. It now has the ability to access the funds it needs to ensure that it has a sustainable future and can adapt to the changes in the postal market.
The universal postal service will continue to be protected by the regulatory regime set out in the Postal Services Act 2011. Ofcom has been given a primary duty to ensure that the universal postal service is maintained and the regulatory tools to intervene if it is under threat.
In addition, building on the success of the initial scheme, and in recognition of their work in turning around the Royal Mail, the Government intends to gift up to 1% of the shares of the company to Royal Mail’s UK employees. These shares will come from Government’s remaining holding and they will be subject to sales restrictions.
This builds on the 10% of the total shares in the company that were awarded to Royal Mail employees as part of the 2013 flotation.
The Government see no policy reason to keep their remaining stake in Royal Mail.
Post Office Ltd, which operates the network of branches throughout the UK, remains wholly owned by Government and was separated from Royal Mail in April 2012. The relationship between the Post Office and Royal Mail is a commercial one and a 10-year contract for the delivery of Royal Mail services through post offices was put in place in 2012.
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