The Government has started selling half of its remaining 30% stake in Royal Mail.Around 150 million shares – 15% of the privatised company – will be placed with institutional investors.
It also announced it would give up to a further 1% of the company to employees, adding to the 10% awarded to staff last time.
The coalition government sold 70% of the 500-year-old postal service when it was floated in 2013.
Chancellor George Osborne told a City audience at the Mansion House on Wednesday that the sale of the remaining stake had begun.
“We want to help the Royal Mail attract more investment and serve its customers, and use the money we raise in return to pay down the national debt,” he said.
“And we’re also going to make sure that there is a special bonus for the workforce who have done such a great job turning Royal Mail around.
“Thanks to them, Royal Mail’s share price has risen; so we’re going to give more of the shares to the staff. Tomorrow we will announce more details of that, and how much of our stake we have sold.”
The sale will raise around £770m for the taxpayer.
Ministers were advised by Goldman Sachs and UBS, and came under fire when the share price was set at 330p and then soared by nearly 90% on the stock market.
Last week, Mr Osborne announced he would sell taxpayers’ remaining 30% stake, worth about £1.5bn, as part of a renewed push to wipe out the budget deficit.
Postal workers’ union CWU said it showed the Conservatives were “only interested in privatisation dogma and making the rich richer”.
BofA Merrill Lynch, Goldman Sachs and JP Morgan are acting as book runners for the 15% placing with institutions.
The placing will take place overnight through a process known as an “accelerated book build”.
Details of the share price will be announced later.