Business

Government sells half of its remaining Royal Mail shares

POST BOX Image copyright AFP

The government has sold half of its remaining 30% stake in Royal Mail, raising another £750m for the Exchequer.

Postal workers will receive a 1% stake in the company worth about £50m, in addition to the 10% given to them when the government started its sell-off in 2013.

The remaining shares will be sold to institutional investors, such as pension funds.

The move has been criticised by Labour.

Royal Mail's share price fell nearly 4% on the news.

In his annual Mansion House speech in the City of London, Mr Osborne said: "We want to help the Royal Mail attract more investment and serve its customers, and use the money we raise in return to pay down the national debt."

"And we're also going to make sure that there is a special bonus for the workforce who have done such a great job turning Royal Mail around.

"Thanks to them, Royal Mail's share price has risen, so we're going to give more of the shares to the staff."

But shadow business secretary Chuka Umunna MP said: "It's disgraceful the government is rushing to dump its stake in Royal Mail to City speculators without giving ordinary investors a look-in."

Last month, Royal Mail reported an increase in full-year profits as cost cuts helped the company in a "challenging" market.

It reported £740m in annual adjusted operating profit before transformation costs, up 6% from a year earlier.

Revenues in the year to 29 March were barely changed at £9.4bn.

UK parcel volumes grew by 3%, although revenues from its parcels business rose by just 1%. Letter volumes fell by 4%, with revenues from letters down 1%.

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