The government says the Royal Mail needs both outside investment and expertise The exact way in which the government intends to privatise the Royal Mail will be announced later when it publishes its Postal Services Bill.
It comes after Business Secretary Vince Cable confirmed last month that a new private firm would be formed to run sorting and delivery operations.
Royal Mail staff will be offered at least 10% of the shares in the company, but unions oppose the privatisation.
The Post Office network will not be included in the sell-off.
Source: Hooper review 2010
This part of the Royal Mail will instead remain in public hands.
The Royal Mail’s pension fund – which has a substantial deficit – will also not be included in the privatisation, and will instead be taken on by the government.
Mr Cable said last month that he had come to his decision after an independent report said the postal service’s outlook had worsened.
This review by Richard Hooper, a former deputy chairman of communications regulator Ofcom, concluded that the Royal Mail’s universal postal service could only be maintained through an injection of private sector money and expertise.
The key detail expected to be announced in the bill is whether the government proposes that the Royal Mail be sold to a private company or companies, or in a public share sale instead – which would probably mean the existing management remaining in control.
The main postal workers’ union, the CWU, says that privatisation of the Royal Mail would lead to higher prices for consumers and job losses for staff.
The Royal Mail has 176,000 employees.
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