Remember the red post-boxes so famous around the world? The correspond to the near 500-year-old state-owned Royal Mail postal service, which is about to go public in the coming weeks. The size of the sale will depend on market conditions but analysts predict it could be between 2 and 3 billion pounds ($3-$4.7 billion). The stock will be listed on the London Stock Exchange.
The sale of this public icon, one of Britain’s biggest employers with around 150,000 staff, is designed to collect money to help finance the modernization of the service, founded by King Henry VIII in 1516. Workers will be granted 10% of the shares worth up to £2,000 each, and an 8.6% pay rise over three years. The remainder will be on offer to institutional investors and the general public. However the plan has been fiercely opposed by the workers and unions. The Communication Workers Union is gearing up for strikes over post-privatization pay and employment security.
CWU general secretary Bill Hayes has warned that staff will not “sell their souls” for such a stake. “Postal workers know that privatization would mean the break-up of the company, more job losses, worse terms and conditions, and attacks on their pensions. It would be a wrecking ball to the industry they work in,” he said.
Britain has a history of selling key state-owned enterprises (Rolls Royce, British Airways and BP). But even conservative and privatization enthusiast Margaret Thatcher saw the Royal Mail as off limits. This is the fourth time the group has tried to go public in the last 19 years. They all failed due to opposition from within the governing majority.
*Image by Lucy Tobin.