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In the next two weeks, the £3.6 billion sale of the Royal Mail to Czech billionaire Daniel Kretinsky might be finalized.
Although Mr. Kretinsky passed earlier tests when he purchased further shares in the 500-year-old firm, the acquisition must comply with the UK’s new regulations on foreign ownership of businesses.
The sale’s development indicates that the administration has rejected his purported ties to Russia.
Although previous investigations have established no connection, his ownership of a gas transmission company.
That delivers Russian gas to Europe has sparked rumors that he has ties to Vladimir Putin’s administration.
Mr. Kretinsky, who is referred to as the Czech Sphinx due to his low profile, has pledged to keep the six-day-per-week delivery service available across Britain at the same cost.
According to the BBC, he also pledged to keep the company’s name and tax residence the same for five years and to refrain from touching its pension surplus.
The deal also states that there would be no mandatory layoffs for five years. The offer has been proposed to Royal Mail’s shareholders by the company’s board.
The National Security and Investment Act now requires ministers to approve the agreement. Before being privatized in 2013, when then-business minister Vince Cable sold.
A share on the London Stock Exchange under David Cameron’s coalition administration, Royal Mail was controlled by the state for centuries.
Shares were made available to the public, and the company’s worth increased. However, its share price has remained slow ever then.
The holding company that now controls Royal Mail, International Distribution Services, is trading at 357 pence a share, which is not much different from the 330 pence they sold for over ten years ago.
As a consequence, the firm was removed from the FTSE 100 index of leading UK companies in 2022.
As individuals started mailing packages instead of letters, Royal Mail has had trouble competing. The quantity of letters sent has drastically decreased with the advent of email and other electronic communication; now, half as many are sent as in 2011.
Royal Mail reported a £336 million deficit in May, according to International Distribution Services. Its other interests, such as the Amsterdam-based parcel provider GLS, enhanced the overall company’s financial success.