The British government began moves on Wednesday to sell off upto 90 percent of state-owned letters delivery business Royal Mail, with the remaining stake reserved for the company's staff. Introducing a bill to parliament, the government said it would take on a pensions deficit which had been valued by trustees at 10.3 billion pounds ($16.3 billion).
"We're keeping an open mind, it could be an IPO, it could be a trade sale," Business Secretary Vince Cable told reporters at a briefing on the bill. He declined to put a value on the business, which has more than 155,000 staff, or set a specific timetable for the sale.
The Conservative-Liberal Democrat coalition government, which took office in May, is hoping to succeed where its Labour predecessor failed with a less ambitious plan. Labour dropped plans last year to sell upto 30 percent of Royal Mail, citing market conditions and also facing strong opposition from trades unions.
The Communication Workers Union (CWU) accused the government of having an obsession with privatisation. The government said that Royal Mail's operating profit for its letters business in 2009-10 was 121 million pounds, but that its profit margins of less than 2 percent badly lagged those of continental European peers Deutsche Post and TNT.