World Economy

Royal Mail Final Stake Sale Raises $899m

Royal Mail Final Stake Sale Raises $899mRoyal Mail Final Stake Sale Raises $899m

The government says it has raised £591.1 million ($899.7 million) from selling its final stake in Royal Mail at 455p a share, according to BBC.

The money was raised from selling a 13% stake in the business, while a 1% stake was awarded to Royal Mail workers.

The sale means the government has received a total of £3.3 billion from the Royal Mail privatization.

The privatization of Royal Mail began in December 2013, but it was criticized after the shares almost doubled from their initial price of 330p, BBC reported.

Last year, a report commissioned by the then Business Secretary, Vince Cable, found that the government made £180m less from the initial sale than it could have.

It said the shares could have been valued up to 30p more than the flotation price because of the high level of demand from banks and individuals.

In early trade on Tuesday, Royal Mail’s shares fell 21p, or 4.5%, to 451.20p.

Following the latest stake sale, Business Secretary Sajid Javid said it was “a truly historic day for Royal Mail”.

“We have delivered on our promise to sell the government’s entire remaining stake, which means that for the very first time, the company is now wholly owned by its employees and private investors.”

The government said all proceeds from the sale would be used to pay down the national debt. It also said that employees now owned a 12% stake in Royal Mail.

However, the Communication Workers Union said the sale was a “disgrace”.

“The remaining government share in this profitable company should have been used to safeguard the public’s voice in Royal Mail and ensure the continuation of daily deliveries to every address in the country,” said CWU general secretary Dave Ward.

“The Tories have instead chosen an ideological course that puts the fundamental ethos of a centuries-old national institution in jeopardy.”