UK launches historic Royal Mail float The coalition has announced its historic plan to float Royal Mail on the stock exchange, triggering a privatisation that even Margaret Thatcher thought a step too far. Vince Cable, business secretary, said the government intended to dispose of a majority of the company taking account of the 10 per cent stake that will be given to its 150,000 employees. The formal "intention to float" kicks off a sale process expected to be completed in October or November. The Department for Business said the amount to be sold would be influenced by market conditions at the time of the transaction, investor demand and ensuring value for money for the taxpayer. That means at least 41 per cent of Royal Mail will be floated, though the figure could be higher. The company is thought to be worth £2.5bn-£3bn. Ministers decided to go ahead with the sale despite the threat of strikes from mid-October by the Communication Workers Union, which plans to ballot its members in its fight for protection of pay, job security and pensions. Thursday's announcement said Royal Mail expected industrial action to take place but it had "contingency plans in place and will also consider its legal options." Michael Fallon, business minister, said the strike threat would not derail the flotation. He said privatisation would allow Royal Mail to invest in its future without having to compete with hospitals and schools for capital. Mr Cable said it was "an important day for the Royal Mail, its employees and its customers. HM government is taking action to secure a healthy future for the company. These measures will help ensure the long-term sustainability of the six days a week, one-price-goes-anywhere universal postal service. The public will be able to buy shares in a retail offer, available through stockbrokers and direct from the government via a special website, though the marketing campaign will be lower-key than the 1980s" "Tell Sid" advertisements for British Gas shares. The minimum application size in the retail offer will be £750 for members of the public and £500 for Royal Mail employees, who have priority if they want to buy extra shares. Royal Mail intends to propose a final dividend, to be paid next July, of £133m. This is approximately two-thirds of the full-year dividend of £200m that would have been proposed if it had been listed throughout the year. Combining this UK presence with our pan-European parcels business GLS should result in a financial profile that combines revenue growth and margin progression to underpin strong cash flow generation Moya Greene, chief executive, Royal Mail Royal Mail is taking on £600m of loans from banks, with another £800m available if necessary. This will replace the loans it currently has from the government. It currently pays an average interest rate of 8.8 per cent on loans from the government, meaning its new borrowings are likely to be on far more attractive terms to the company. Moya Greene, chief executive, said she was determined to deliver a "revitalised company." This network and our strong brand, coupled with the high service quality delivered by our people enable us to take full advantage of the growth in UK e-commerce to further enhance our pre-eminent parcels business. Combining this UK presence with our pan-European parcels business GLS should result in a financial profile that combines revenue growth and margin progression to underpin strong cash flow generation. Results for the first three months of the year show that Royal Mail's profit margin was 5 per cent, compared with 4.4 per cent last year and almost nothing the previous year. The trend of declining letter volumes and rising deliveries of parcels continued. Chuka Umunna, shadow business secretary, said: "The government has not addressed the huge concerns that remain on the impact the Royal Mail sale will have on consumers, businesses and communities, but ministers are ploughing on regardless.""