The Royal Mail has won the backing of the Department of Trade and Industry in its bid to secure cash to modernise the firm and help plug its pension deficit.
The Royal Mail has made a formal request to the UK Treasury for a cash injection of £1.25bn, and greater access to the £750m it already has on its books.
Should the Treasury grant the Royal Mail’s request, then it is likely to want the money back at a later date and one way for that to happen would be via a share sale, analysts predict.
However, that move is likely to bring the organisation into conflict with the Communication Workers Union (CWU).
It is balloting its members to find their views on the share scheme and the pensions deficit – currently estimated at £5m.
“A share scheme will do nothing to tackle the chronic under-investment, a record pensions deficit and the introduction of competition. We need a publicly owned postal service that is in a healthy position going forwards,” said CWU general secretary Billy Hayes.