The sale of Royal Mail to Czech billionaire Daniel Kretinsky's EP Group is close to being finalized and could be confirmed within the next two weeks, according to sources close to the matter.
Kretinsky agreed to make additional concessions in order to secure the buyout, according to BBC information.
The unions met with Kretinsky's advisers this week, and although some sources say they remain “suspicious” of him, the Communications Workers' Union (CWU) said the meetings with the parliamentary group were ” constructive”.
The deal will still need approval under the National Security and Insurance Law, although authorities conducted a similar review when he increased his stake in the company.
Mr. Kretinsky's parliamentary group declined to comment.
The entrepreneur has already offered the following guarantees in an attempt to close the transaction:
Maintain universal service “one price goes everywhere” and not plunder pension surpluses. Retain Royal Mail's brand, head office and tax residency in the UK for the next five years. Respect union demands for no compulsory redundancies (until 2025). Negotiating with the CWU will extend this commitment on employment
The board of Royal Mail owner International Distribution Services (IDS) has recommended the offer price of £3.6 billion to its shareholders and it is expected that a sufficient number of 'among them accept it, thus allowing the operation to continue.
It is believed that additional guarantees could include extending the duration of the guarantees it has offered.
The BBC understands that they were enough to convince the British government that Daniel Kretinsky is a suitable owner for this historic and important organization.
Speaking to MPs on Tuesday, Business Secretary Jonathan Reynolds called him a “legitimate business figure” whose alleged links to Russia had already been scrutinized and dismissed when he became the main shareholder of the company.
A CWU spokesperson said its meetings with the parliamentary group so far have been “honest and constructive and are expected to continue in the coming days”.
Royal Mail, which was spun off from the Post Office and privatized ten years ago, is legally required to provide a single-price “universal service”, meaning it must deliver letters six days a week, Monday to SATURDAY. and parcels Monday to Friday.
But the company's performance has deteriorated in recent years, leading to heavy financial losses.
Customers also complain about deliveries, with important medical appointments and legal documents not delivered on time.
The volume of letters posted in the UK has also fallen, with half the number sent compared to 2011 levels.
Meanwhile, parcel deliveries have become more popular – and more profitable.
Parent company IDS made a small profit last year entirely generated by its logistics and parcels businesses in Germany and Canada, offsetting losses at Royal Mail.
The Universal Service Obligation is currently under review, with Royal Mail suggesting to regulator Ofcom that reducing second-class deliveries to every other weekday would save up to £300m a year and give the company “a fighting chance”.
In an interview with the BBC earlier this year, Kretinsky said that “as long as I'm alive” he would respect the universal service obligation – but he favored the reforms suggested by the Royal Mail.
The Department of Business has also been contacted for comment.
