UK minister says no regrets, no apologies for Royal Mail sale

Tue Apr 29, 2014 11:03am EDT

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* British ministers say no regrets over Royal Mail sale

* Lawmakers say deal priced too low to avoid flop

* Minister Cable accepts need to consider other sale methods

By William James

LONDON, April 29 (Reuters) - British ministers in charge of the privatisation of Royal Mail said on Tuesday they had no apologies to make over criticism that it was sold off too cheaply, but said they may look at different ways to sell off public assets in future.

The government sold 60 percent of the postal firm last October at 330 pence per share, ending 500 years of state control and raising 2 billion pounds ($3.36 billion) for the public purse.

Royal Mail's share price has since risen by as much as 87 percent, provoking heavy criticism from lawmakers and trade unions who say the deal was mishandled and allowed big banks and financial speculators to turn a quick profit.

But on Tuesday Business Secretary Vince Cable and Business Minister Michael Fallon rebuffed stiff criticism from a panel of lawmakers who said the government had priced the shares too low because they were afraid the deal would flop.

"Hindsight is a wonderful thing, but on the basis of the facts we had, the information we had, the knowledge we had of the company, this was a successful transaction," Cable said. "We don't apologise for it, and we don't regret it."

A report by the government's spending watchdog earlier this month said the sale had short-changed taxpayers by at least 750 million pounds.

Cable said the threat of strike action and uncertainty over the health of the U.S. economy had suppressed the price buyers were willing to pay, and that a failed sale would have seriously damaged the value of the company.

The Communication Workers Union, which represents the majority of Royal Mail staff, said Cable's claims were utterly ridiculous and called on him to resign.

Cable, who was making his third appearance before the parliamentary panel to defend the sale, conceded that other ways of disposing of large state assets needed to be considered.

"The lesson to be learned from this whole exercise is 'is this the best system for getting the maximum value for taxpayer assets?'" Cable told the business, innovation and skills committee. "We accept the need to look at different methods."

Cable said sealed-bid auctions and trade sales - where individual stakes are sold to other firms and not publicly traded - could be considered as methods to sell off other assets. He did not rule out further public share sales.

On Wednesday bankers from UBS and Goldman Sachs , the two banks that led the floatation, will give evidence in parliament on their role in the sale.

Britain's financial regulator said on Monday there were no grounds for an investigation into the Royal Mail sale, rejecting calls from a separate panel of lawmakers for a closer look at the reasons behind the sharp share price rise. (Editing by Pravin Char)

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