By GREGORY KATZ, Associated Press
LONDON (AP) — Britain's coalition government has confirmed plans to privatize the country's 500-year-old Royal Mail this fall, a move opposed by postal unions and condemned by the opposition as a "fire sale" of a lucrative state asset.
Business Secretary Vince Cable said Thursday that an initial public offering of a majority stake in the postal service was scheduled for the coming weeks.
Officials say the expected stock sale will be open to members of the public as well as to larger institutional investors. The minimum investment will be set at 750 pounds ($1,185) with 150,000 Royal Mail employees getting a slice of the stock offering.
Plans call for 10 percent of the stock to be given to UK-based staff, with at least 41 percent to be sold to the public, including institutional investors.
"These measures will help ensure the long-term sustainability of the six-days-a-week, one-price-goes anywhere universal postal service," Cable said, predicting a "healthy future" for the company.
The government said the stock sale would allow the Royal Mail to tap investment that it needs to modernize and to compete in areas such as parcel delivery — which is becoming a major source of revenue as letter volumes decline with the growing use of email.
Business minister Michael Fallon said the privatization would "give Royal Mail the commercial freedom it needs to succeed in a fully liberalized, competitive market."
The government did not provide details about how the stock would be priced at the initial public offering. It added that the Post Office, which runs the nation's network of postal counters and was split off from the Royal Mail last year, was not for sale.
Opponents of the Royal Mail's privatization say the economic case is not compelling. Ian Murray, business spokesman for the opposition Labour Party, accused the government of a "politically motivated fire sale."
"The Royal Mail is a much-cherished national institution," he told lawmakers in the House of Commons.
"The case for privatization has not been met. With recent annual profits of over 400 million pounds, we should be allowing it to flourish in the public sector."
Even as the announcement of the IPO was made, the Communications Workers Union was planning to ballot workers for possible strike action. The union is opposed to the stock plan because of fears of potential job losses.
There are concerns the threat of industrial action may damp demand for the stock.
The privatization spells a major change for the long-established mail service.
Its familiar red pillar boxes will be protected by law, but tampering with a service so central to public life is also a delicate matter.
Even the late Margaret Thatcher, who championed the sale of state-owned companies such as British Telecom and British Gas, backed away from privatizing Royal Mail during her tenure as prime minister in the 1980s.
Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.