Could RM become insolvent

[disheartened]

I believe Royal Mail are due to get a wedge of money form Europe to plug the pension hole,then once that has been done the sell off can be talked about in real terms,will the fact that Mr Cameron veto'd the eu treaty throw doubt on the money from Europe,its reported that if RM do not got the money,come March/April they will be unable to pay their money in to the pension fund and possibley our wages,thus being made insolvent.I also believe the sell off would be at least a year away,any interested parties would want to see want the books read like without the burden of the pension deficit.

Perhaps the money from Europe is already a done deal!!! who knows
Would the goverment really let RM become insolvent?

[fishtank]

It's murky water.
You could argue that Cameron throwing his toys out of the pram has handed the power in Europe to France and Germany.
Germany and France are not what you would call pro-postal liberalization so the European Commission may be pointed in a more "helpful" direction if it serves to protect La Poste and Deutsche Post.

Deutsche Post have just been knocked back in an attempt to overturn an order to repay 1.15 billion euros in state aid that was ruled unlawful.
It will be interesting to see if they appeal to the EU Court of Justice.now that Merkel and Sarkozy are driving the bus.

[keithposty]

i am of the opinion that royal mail will become insolvent if they do not get the european state aid by march.
europe have all but said no to royal mail will have to ditch there share in the dutch firm GLS and the pension problem is firmly at royal mail/goverment of the days problem. cameron going it alone has not put the rest of europe in a positive state of mind.

the other thing we have to remember that if royal mail go bankrupt, it could set up again the very next day with a slighly different name, I.E. royal mail logistics instead of royal mail group ltd, and as it will be a different company, all liabilities including the pension fund defecit can be kissed goodby

that includes all the benefits the cwu has gained

BUT THAT IS JUST MY OWN OPINION

[fishtank]

Keep in mind that state aid does not mean Europe bailing out Royal Mail.
What the Government is seeking is approval to bail out Royal Mail themselves which most likely means writing off the commercial loans to government and taking over the pension deficit....and assets.

It is possible that even without permission the commercial loans could be renegotiated but that still leaves the pension deficit which the company is now suggesting it can no longer fund even though it is only months since it agreed a new funding package.
A great deal of this is political...other than it's pension commitments and the loans to government this company owes no one.
If it was pushed into insolvency it would have to be the government itself that did it.
If the company simply refused to meet it's pension deficit commitments next year there is still £1Billion in an escrow account that could be used to fill that gap until a solution was found.

It's not as apocalyptic as some would make out.
Don't get me wrong it's not good at all but there are those who will try to use the situation to move forward their own agenda.
Be aware.

[keithposty]

+
the whispers i am getting is that it will be the pension fund administrators that will put royal mail into adminstration, not the goverment if it fails to get european state aid

but again, its just whispers and not confirmed facts

time will tell

[fishtank]

+
the whispers i am getting is that it will be the pension fund administrators that will put royal mail into adminstration, not the goverment if it fails to get european state aid

They would only do that if it was judged to be in the best interests of the scheme.
As i have said there is a £1Billion emergency fund in escrow that could be used to fund the deficit for 3-4 years until a viable solution was found
That solution would not be good for our pension as it would probably mean transfer to a money purchase scheme but anybody who thinks state aid and privatisation will save us from that particular fate is having a laugh.
This government and future governments will grind our pension to dust anyway.

[keithposty]

This government and future governments will grind our pension to dust anyway


that is one thing we will both agree on

[BarnsleyLackey]

I may be naive, but everyone uses the post, how can things be so f****d?

[AnotherLimey]

I may be naive, but everyone uses the post, how can things be so f****d?

Ever heard of DSA?

[mandelsons_toenail]

I may be naive, but everyone uses the post, how can things be so f****d?

Ever heard of DSA?

Because we have cluster managers who dont know what dsa is

Pen pushers, jobs for the boys

too many line managers and people of special projects

one sick joke

the postie gets all the flack but we pound the streets daily

f**k them

[flaminmoses]

I believe Royal Mail are due to get a wedge of money form Europe to plug the pension hole,then once that has been done the sell off can be talked about in real terms,will the fact that Mr Cameron veto'd the eu treaty throw doubt on the money from Europe,its reported that if RM do not got the money,come March/April they will be unable to pay their money in to the pension fund and possibley our wages,thus being made insolvent.I also believe the sell off would be at least a year away,any interested parties would want to see want the books read like without the burden of the pension deficit.

Perhaps the money from Europe is already a done deal!!! who knows
Would the goverment really let RM become insolvent?

ah
that explains why they are trying to delay my tribunal.

[pcb]

remember that that RM said less than a year ago that the deficit was looking like 10Bn, the postal act was rushed to parliament and then it transpires that the deficit since then has fallen to 4Bn due to the markets!
It did not help that Cameron pandered to the little Englanders and that this might have an indirect effect upon gaining acceptance for state aid to plug the deficit.
The go ahead from Brussels would allow RM to use monies at present used to service the debt to be added to the profits so when it happens the profit RM will make will be substantial therefore making private investors interested.

[hantsman]

RM goes bust,

it will never happen, they will get bailed out, check Northern Rock. (Whatever Keith thinks)

[keithposty]

all i can see at the moment is there is a case for royal mail to be made insolvent

all that would happen would be the official receiver appointed would run royal mail untill it either makes a viable profit, or sold to a private consortium (hedge fund for example)

royal mail going from the cpi to the rpi and reduce the pension defecit by half would be a first step by making it attractive for private investment

the turnover royal mail makes is 64 billion a year (pre tax and deductions)
even making a million a day profit now does not cover its operational costs, blame dsa, bad management, whatever, those are the facts.
europe will be less inckined now to assist britain in a state hand out, so has this goverment got a few billion to bail out royal mail like northern rock, i doubt it. not with the country having to borrow an extra 76 billion this year

what better way now for the goverment to wipe out all its royal mail liabilities

i am not saying this sinario will happen

its a possibility

thats all

[fishtank]

The government doesn't need to or intend to throw any money at Royal Mail.
All it intends to do is....

1. Wipe out the debt that RM owes the government in commercial loans...a paper exercise.

2. Take over the pension liability which means in the long term the government will be funding our pensions but in the short term they will receive a £25billion windfall in the shape of the pension assets which no doubt they intend to use to fund tax cuts prior to the next election in an attempt to buy some votes.

3. There is also the question of the £1billion lying in an account to protect the pension deficit that won't obviously be needed if the government takes over the pension.