The Royal Mail group is set to pass into the hands of foreign investors, but the State will retain a “golden share” in the company.
This means the the government will have to approve any key changes to Royal Mail’s ownership, head office location and tax residency.
This is something the government does with companies considered crucial to its security, including arms makers BAE Systems and Rolls-Royce.
In Royal MailIn this case, it is the company’s role in communications infrastructure that is of national importance.
Below the affairthe group agreed to retain Royal Mail’s headquarters and tax residence in the United Kingdom for at least five years.
Learn more
Many wonder why a Czech billionaire wants to buy the owner of Royal Mail
Tankers carrying Russian gas face British sanctions for the first time
He also promised to maintain the universal service obligation for first-class mail to be delivered anywhere in the country at a fixed price six days a week, under Mr. Kretinsky’s leadership.
However, it has been suggested that the second class post could be reduced to every other day of the week.
The government also blocked Royal Mail from paying dividends to its owners unless the company met its financial targets.
Please use Chrome browser for a more accessible video player
Dividends and asset sales will also be blocked if they endanger universal service.
This, combined with the promise that workers will receive a 10% share of any dividend paid to Mr Kretinsky, means the PE Group is also on track to pacify the unions.
Despite these safeguards, the deal will increase scrutiny of the secretive Czech owner of the PE group.
Daniel Kretinsky has already shown keen interest in UK assets – it owns a 10% stake in Sainsbury’s and a further 27% in West Ham football club
The sales were financed by profits from its vast energy portfolio.
This includes a gas transportation company called EUStream that transports Russian gas to Europe.
The company operates under European Union (EU) authorization and does not purchase or sell Russian gas. The British government is clearly happy with Mr Kretinsky’s ties to Russia, but they are likely to come under greater scrutiny.
The Czech billionaire sees Royal Mail as a challenge and an opportunity to turn around and modernize a company that has failed to meet its targets and has been hit with fines by regulators.