U.K.’s Royal Mail Said to Seek 1.5 Billion-Pound Loan Before IPOStephen Morris
Royal Mail Group Ltd., the U.K.’s postal service, is in talks with banks to raise 1.5 billion pounds ($2.3 billion) of loans to provide funding before a planned sale of the company’s shares, according to three people with knowledge of the matter.
The debt may include a term loan and a credit line, and the state-owned company has hired Rothschild to advise them on the financing, said the people, who asked not to be identified because the deal is private. The facility will be used for working capital and banks will be appointed to arrange the deal.
Mish Tullar, a London-based spokesman for Royal Mail, and Alex Simmons, a Rothschild spokesman who works for Smithfield Consultants Ltd., both declined to comment on the financing.
An IPO is the government’s “preferred method of sale” for Royal Mail, U.K Business Minister Michael Fallon said April 29. The government plans to appoint advisers for the share sale by the end of the month, the minister said.
The company’s full-year profit more than doubled to 403 million pounds in the 12 months to March 31, it said earlier this week. Sales gained 5 percent to 9.28 billion pounds.