Royal Mail to sell London property for 111 million pounds

Hotel Properties

14/10/2014 15:03

LONDON, Oct 14 (Reuters) - Britain's Royal Mail  RMG.L  is 
selling one of its old central London mail centres to a hotel 
and real estate company for 111 million pounds ($176.8 million) 
in cash. 
    The postal operator, sold off in October last year to much 
controversy in Britain's biggest privatisation in decades, said 
on Tuesday it would use the net cash proceeds from the deal for 
general corporate purposes. 
    The location, a one-acre site near Paddington railway 
station in West London, is part of a portfolio Royal Mail says 
contains surplus property it intends to sell off. It was vacated 
in 2008. 
    It will be sold to Great Western Developments Limited, a 
listed Singaporean hotels and real estate company owned by Hotel 
Properties Limited  HPPS.SI  which holds a 70 percent share with 
Anchorage View Pte Limited owning the remaining 30 percent. 
    The deal is expected to conclude on Dec. 8. 
    If Great Western Developments sells the property within a 
year of purchase Royal Mail will be paid 50 percent of net sale 
proceeds above 111 million pounds, and 25 percent if the sale is 
within two years of the deal. 
    Royal Mail will also be due another 20 million pounds if the 
purchaser is successful in securing further planning permission, 
the firm said. 
    Royal Mail was sold off last year for 2 billion pounds in a 
controversial deal.  
    Britain sold a 60 percent stake at 330 pence per share after 
a politically charged debate which pitted the coalition 
government against Royal Mail's heavily unionised workforce and 
the opposition Labour party. 
    The stock quickly rose by as much as 87 percent, prompting 
criticism that the price had been set too low and the government 
had short-changed the taxpayer. 
    Concerns over increased competition in parcels and the 
impact of a rival UK mail delivery service have seen the shares 
come off again since. 
    They rose 2 percent on the news to 401p by 1350 GMT. 
    (1 US dollar = 0.6277 British pound) 
 
 (Reporting By Ahmed Aboulenein; Editing by Neil Maidment) 
 ((ahmed.aboulenein@thomsonreuters.com; +447824351396;)) 
 
Keywords: ROYAL MAIL PROPERTY/