How many banks does it take to float the Royal Mail? Government hires four – including Barclays and Goldman – and opponents claim their bill will tot up to £30m
Campaigners against the Royal Mail privatisation claim the four top City banks signed up to help handle it stand to make £30million from the deal.
UBS, Goldman Sachs, Barclays and Bank of America Merrill Lynch have been appointed by the Government to prepare for the controversial £2.5billion sale.
Billy Hayes, general secretary of the Communication Workers Union, which has warned that postal services will be hit by privatisation, said: ‘The Government is wasting significant sums of taxpayers’ money on a deeply unpopular and unnecessary privatisation agenda.
‘Throwing public money at banks to flog a national asset is poor use of public funds. This Government has got it wrong on privatising Royal Mail.’
Mario Dunn, of campaign group Save Our Royal Mail, said: ‘We learn today that banks are set to make up to £30million when the Government sell off Royal Mail.
‘Once again consumers will lose out when prices rise and deliveries are reduced, but banks make millions.
‘The public strongly oppose selling off this cherished British institution and it adds insult to injury that the likes of Goldman Sachs are set to make a huge profit from the sale.”
Companies getting ready to float usually hire a large number of banks to handle the deal – insurer Direct Line had a syndicate of 12 which shared an estimated £20million of fees last year, while giant commodities trader Glencore had 23 banks which together were paid an estimated £116million in 2011.
Business Minister Michael Fallon said no final decision had been made on the structure of the sale of Royal Mail, adding that all options remained open.
He said: ‘Preparations for the sale of shares in Royal Mail continue to build momentum and these appointments represent another important step towards a sale of shares this financial year.
‘While all options for the form of sale remain open, it is important that we are in a position to move ahead swiftly with our chosen route once we take the final decision.
‘Given the lead time and preparatory work involved in readying an IPO [initial public offering], the appointed banking syndicate will work to make sure we are ready to proceed when the time comes and will be able to deliver strong, high-quality investor demand to ensure a successful IPO for the taxpayer and for Royal Mail.’
The appointment of banks to junior syndicate positions for an IPO will be announced in the coming months.
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