The UK government has confirmed it intends to launch a stock market flotation for Royal Mail.
Business secretary Vince Cable insisted that the move is a necessary one if the future of the company is to be secured.
He said: "These measures will help ensure the long term sustainability of the six days a week, one-price-goes-anywhere universal postal service."
However, the stock market flotation of Royal Mail was criticised by the shadow business secretary Chuka Umunna, who described it as a "politically-motivated fire sale".
Under the terms of the government's plan, employees will be given ten per cent of the shares, while institutional investors and members of the public are to be offered the rest.
The Communication Workers Union has announced it is opposed to the move and is set to ballot its members with a view to going on strike.
Royal Mail will take on £600 million of loans from banks as part of its privatisation, with another £800 million available if necessary.
Find up to date information on the FTSE 100 and spread betting strategies at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.