The major postal reform plans announced in Britain and France this week have generated verydifferent reactions. French president Nicolas Sarkozy yesterday backed the proposal to finance La
Poste’s investments with state-owned funds. But British prime minister Gordon Brown facesopposition to the potential sale of a minority stake in Royal Mail to TNT.In France, President Sarkozy responded to the proposals of the Ailleret commission by sayingthat La Poste would be changed into a limited company but its shares would only be sold topublicly-owned institutions “such as the Caisse des Depots” (CDC). This would maintain its statusas a publicly-owned enterprise while opening its capital to other sources of investment. La Postewould need to find about €3 billion for investments up to 2012, the president commented.
French unions said they were surprised by the president’s comments ahead of a meeting withthe head of state planned for today (Friday). Union leaders predicted that even if the CDCinitially took a stake in La Poste, this holding could then be floated on the stock exchange at alater date once conditions on the financial markets had improved.
In its official report published this week, the Ailleret commission concluded that La Posteneeds to raise at least €2.7 billion from external sources as part of its total planned investmentsof up to €9 billion in mail modernisation, network expansion and express/parcels acquisitionsduring 2009-2012.
The commission recommended the legal transformation of La Poste into a limited company andsaid its capital could be opened to publicly-owned financial investors such as the Caisse desdepots et consignations (CDC). But it rejected the possibility of a share placement as “neitherdesirable nor credible” and described privatisation as “excluded”.
In Britain, the government’s proposal to seek a strategic investor to buy a minority stake inRoyal Mail’s letters business in order to bring in fresh capital and restructuring expertise hasgenerated diverse reactions. Business minister Lord Mandelson, who announced the proposals, hasalready welcomed an expression of interest from TNT.
The Wall Street Journal reported that investment fund CVC is interested in a stake in RoyalMail. The UK-based group already owns a 22% holding in Post Danmark. Deutsche Post could also beinterested in a Royal Mail holding, according to British media.
Meanwhile, a junior ministerial figure, Jim McGovern, parliamentary private secretary in theDepartment of Business headed by Lord Mandelson, has resigned in protest at what he called “thepartial privatisation” and possible sale of a stake in Royal Mail to a foreign company. UK mediareported that several Labour MPs, including senior figures, were unhappy at the postalrestructuring plans. The opposition Conservative Party supports them, however.
The main postal union, the CWU, which financially sponsors a number of Labour MPs, criticisedthe government’s proposals. Dave Ward, deputy general secretary, said: “There is no need to seekprivate funding from outside companies in a joint venture. This would open the floodgates forfull-blown, damaging privatisation. Post is a key public and business service which must retain theprotection and guidance of Government for sustainable success.”
One of the leading British parcel companies, APC Overnight, said the government shouldconsider a “UK partnership” as an alternative to a sale to TNT, describing parcel companies such asitself and rivals Parcelnet, Home Delivery Network and City Link as “viable alternatives”. “APCOvernight can be part of a UK partnership that could resolve the Royal Mail issue,” said marketingdirector Jon Barber. “A Royal Mail – TNT Post partnership should not be seen as a foregoneconclusion, as there are several British-owned companies that should be considered.”
