July 9, 2013 / 7:20 PM / 5 years ago

Royal Mail staff to get shares worth up to 300 million pounds in IPO: report

(Reuters) - Royal Mail employees will get shares that could be worth as much as 300 million pounds as part of the British government’s plans to list the state postal operator, Sky News reported, in what would be Britain’s biggest privatization in decades.

A street cleaner passes a Royal Mail post box in central London June 14, 2011. REUTERS/Chris Helgren

The shares would be handed to employees for free and not at a discount and would equate to 10 percent of Royal Mail’s equity, Sky News said.

At an overall valuation of between 2.5 billion-3 billion pounds, the stake could be worth as much as 300 million pounds ($444.9 million), the broadcaster reported on its website.

In addition to the 10 percent stake, staff would also be guaranteed a proportion of the retail element of the IPO, as a result of which postal workers could end up owning much more than 10 percent of the company, Sky News said.

About 150,000 Royal Mail employees would be eligible for the share scheme while staff at European unit GLS are likely to be excluded, Sky reported.

The government is expected to sell about 60 percent of Royal Mail in the first phase of the privatization, Sky News said, details of which are expected to be included in a statement Business Secretary Vince Cable will make to the House of Commons on Wednesday.

Plans to list Royal Mail have been criticized by unions, which say the sale will spark a decline in postal service provision and working conditions for the company’s 150,000 employees.

Royal Mail, whose history dates back to 1516 and King Henry VIII, and the government on the other hand, argue that access to external capital is vital to the firm if it is to continue shifting its business towards a future focused more on parcels.

Royal Mail declined to comment while the government’s Department for Business, Innovation and Skills said they could not comment ahead of an announcement to Parliament.

($1 = 0.6743 British pounds)

Reporting by Abhishek Takle in Bangalore; Editing by Marguerita Choy

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