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14/05/2012
Half Of Royal Mail London Sorting Office To Be Sold
It has been announced that Royal Mail will sell off half of its flagship sorting office in central London with the transformation of the five-hectare (12-acre) site into flats, netting the postal service up to £1bn.
However the redevelopment at Mount Pleasant on the outskirts of the capital's financial district is unlikely to be completed until after the company's privatisation in about two years time, leading to fears that new owners could asset-strip the business instead of reinvesting.
The high-value land assets, which stretch across the country, also appear to contradict the Royal Mail chief executive Moya Greene's assertions that the company is "balance-sheet insolvent".
Last night the shadow postal affairs minister, Ian Murray MP, called on the government to ensure any land sale profits were ringfenced for reinvestment into the company's modernisation programme.
He said: "There are currently no safeguards as to what might happen to any assets that might be sold. Some venture capitalists will be circling. They may buy it on the cheap, because the government are desperate to get rid of it and get it off their books, and then start selling off prize assets.
"Rather than hundreds of millions of pounds they get from the sale of Mount Pleasant going back into Royal Mail following any sale, it'll go straight into the coffers of a private-equity company, no doubt into a tax haven. What they have to do is make sure with any of these massive asset sales every single penny of it is ringfenced into the modernisation programme."
(H/GK)
However the redevelopment at Mount Pleasant on the outskirts of the capital's financial district is unlikely to be completed until after the company's privatisation in about two years time, leading to fears that new owners could asset-strip the business instead of reinvesting.
The high-value land assets, which stretch across the country, also appear to contradict the Royal Mail chief executive Moya Greene's assertions that the company is "balance-sheet insolvent".
Last night the shadow postal affairs minister, Ian Murray MP, called on the government to ensure any land sale profits were ringfenced for reinvestment into the company's modernisation programme.
He said: "There are currently no safeguards as to what might happen to any assets that might be sold. Some venture capitalists will be circling. They may buy it on the cheap, because the government are desperate to get rid of it and get it off their books, and then start selling off prize assets.
"Rather than hundreds of millions of pounds they get from the sale of Mount Pleasant going back into Royal Mail following any sale, it'll go straight into the coffers of a private-equity company, no doubt into a tax haven. What they have to do is make sure with any of these massive asset sales every single penny of it is ringfenced into the modernisation programme."
(H/GK)
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