(Bloomberg) — Czech billionaire Daniel Kretinsky, who plans to purchase the company that owns UK’s Royal Mail, says the British postal service needs new investment to be competitive.
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Kretinsky currently owns 27.6% of International Distribution Services Plc. If his offer for the rest of the company is rejected, Royal Mail could struggle to stay afloat, he said in an exclusive interview on Bloomberg TV.
Royal Mail risks going into a “deadly spiral” if it can’t offer competitive prices, particularly because of its obligation to deliver letters to every address in the UK at a flat rate, six days a week, he added.
“It has a fixed-cost base, but it’s missing revenues,” he said.
Read More: Kretinsky to Fund Royal Mail-Owner Buyout With Debt, Equity
Kretinsky’s £3.6 billion takeover of Royal Mail’s parent company on the eve of a UK general election looks set to unleash a struggle over the future ownership of Britain’s postal service. He has pledged not to break up the group for at least three years, and to deliver letters six days a week for the next five years.
“Overall, I think factually there is no ground for opposition as long as the idea that Royal Mail can be in foreign ownership is accepted,” he said. “I know what Royal Mail means for British society and for British history.”
In the UK — apart from his investments in the energy sector and in grocer J Sainsbury Plc — Kretinsky is also the second-largest shareholder of Premier League football club West Ham United. A 25.1% stake belonging to the Gold Family is currently for sale.
Kretinsky said that becoming a bigger shareholder of the team is currently not on the table.
However, “if there is an opportunity to increase our stake without becoming majority shareholders, we would be very open to that and I would be proud to be able to even tighten the link with the club,” he said.
–With assistance from David Hellier.
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