Britain to float Royal Mail this financial year

LONDON (Reuters) - Britain unveiled plans on Wednesday to float a majority stake in postal operator Royal Mail later this financial year, promising free shares for workers still fiercely opposed to the country's biggest privatisation in decades.

The initial public offering (IPO) is expected to value Royal Mail, which dates back to 1516 and King Henry VIII, at up to 3 billion pounds.

As per existing legislation, 10 percent of the shares will be set aside for the firm's 150,000 postal workers and Business Secretary Vince Cable told parliament these would be distributed free of charge with the condition that they must be held for three years.

The listing will also include a retail offer for smaller investors, which Royal Mail workers would also receive priority treatment for. Banks Goldman Sachs and UBS have already been appointed to advise the government on the flotation.

Royal Mail Chief Executive Moya Greene says access to external capital is vital for a firm still investing in moving its business away from falling letter volumes and toward a growing parcels industry fuelled by internet shopping.

A parcels boom helped the company, which no longer includes the Post Office, to more than double annual profit in the year to March 31.

Union workers argue the sale will spark a decline in postal services and working conditions for staff, and have urged the government to consider alternative ways to access capital or risk inevitable strike action.

(Reporting by William James and Neil Maidment; Editing by Andrew Osborn and Kate Holton)

Source: http://news.yahoo.com/cameron-says-expects-big-public-support-royal-mail-111549730.html

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