Royal Mail takeover by Czech billionaire approved | Global News Avenue

The sale of Royal Mail’s parent company to a Czech billionaire has been approved by the government.

Daniel Kretinsky’s EP Group’s £3.6bn takeover was approved after agreeing to “legally binding” commitments.

The government will retain a so-called “golden share”, which will require it to approve any major changes to Royal Mail’s ownership, headquarters location and tax residence.

The new owner must also maintain a one-price Universal Service Obligation (USO), which means it must deliver letters six days a week (Monday to Saturday) and packages Monday to Friday.

Mr Kretinsky told the BBC earlier this year that he would pay tribute to the USO – whatever form it took – “As long as I’m alive”.

The USO is currently under review, with Royal Mail recommending to regulator Ofcom that reducing second class deliveries to every other working day could save up to £300m a year and give the business a “fighting chance”.

Other commitments to the union include workers receiving 10 per cent of dividends paid to Mr Kretinski and the creation of a workers’ group to hold monthly meetings with Royal Mail directors to give staff a greater say in how the company is run.

To secure the deal, Mr. Kretinsky has provided the following guarantees:

• Not plundering pension surpluses
• Keep brand name, Royal Mail headquarters and tax residence in the UK for the next five years
• Respect union demands not to impose compulsory redundancies (before 2025)

As well as owning 27 per cent of West Ham United football club and 10 per cent of Sainsbury’s, Mr Kretinsky’s company also owns Gas Transmission Services, which is still delivering significantly reduced amounts of Russian gas to Europe , the costs are paid by and agreed to by the EU.

The acquisition has been called for review national security law because it is considered critical national infrastructure.

Business Secretary Jonathan Reynolds, speaking before MPs in November, described Kretinsky as a “legitimate business figure” who had become the company’s largest shareholder nearly two years ago. Alleged links to Russia have already been scrutinized and dismissed.

The unions met with Mr Kretinski’s European Parliament group over the weekend to hammer out additional commitments and agreed in principle to the package, subject to an “internal democratic process”.

Royal Mail, which was spun off from Britain’s Post Office and privatized a decade ago, has seen its performance deteriorate in recent years, leading to serious financial losses.

Customers also complained about delivery issues, with important medical appointments and legal documents not arriving on time.

last week, Royal Mail fined £10.5m It was penalized by regulator Ofcom for failing to meet delivery targets for first and second class mail.

Ofcom said Royal Mail’s poor service “is eroding public trust in one of the UK’s oldest institutions”.

International Delivery Services (IDS), the owner of Royal Mail, said it had carried out “substantial” reforms this year in an attempt to drive improvements.

The number of letters sent in the UK has fallen sharply, halving compared with 2011.

At the same time, package delivery became more popular and more profitable.

Parent company IDS made a small profit last year, which came entirely from its logistics and parcels operations in Germany and Canada, offsetting Royal Mail losses.

Mr Kretinski told the BBC he planned to invest heavily in rolling out delivery lockers to make online deliveries more efficient, as is happening across Europe.

Daniel Kretinsky began his career as a lawyer in his hometown of Brno and later moved to Prague.

He then made a fortune in energy interests in Central and Eastern Europe.

These include Eustream, which transports Russian natural gas via pipelines through Ukraine, the Czech Republic and Slovakia.

He subsequently made other investments, including a nearly 10% stake in British supermarket chain Sainsbury’s and a 27% stake in Premier League club West Ham United.

The Czech businessman is reportedly worth around £6 billion.