Committee publication · Correspondence · 15 April 2026
Letter from EP Group relating to the Committee's letter of 27 March on the acquisition of Royal Mail, 8 April 2026
From: Business and Trade Committee
Inquiry: Royal Mail
Summary
EP Group responds to the Business and Trade Committee's 27 March letter on the Royal Mail acquisition. The letter addresses debt structures, Royal Mail's liability exposure, and Eustream pipeline operations. EP Group confirms investment-grade credit ratings, details refinancing arrangements totalling approximately €1.4bn, and clarifies that Royal Mail guarantees only pre-acquisition IDS debt due 2026–2030, not acquisition-related borrowing. On Eustream, EP Group declines to quantify LNG volumes or Russian gas revenues, citing operational constraints and regulatory obligations.
Key findings
- EP Group's debt-to-EBITDA ratio is 'well below 1.75x' including acquisition debt; S&P rates the group as investment grade, demonstrating financial resilience.
- Royal Mail is guarantor only of pre-acquisition IDS debt (EUR 550M due 2026, EUR 500M due 2028, GBP 250M due 2030); Royal Mail bears no liability for EP Group's EUR 1.4bn refinancing or acquisition debt.
- IDS holds undrawn revolving credit facility of GBP 925M and 'very strong liquidity position' in 'high hundreds of millions GBP' to service debt obligations.
- EP Group capitalized approximately GBP 700M intra-group loan to Royal Mail in June 2025, fulfilling December 2024 commitments to HM Government.
- EP Group declines to quantify LNG volumes through Eustream or Russian gas revenues, citing EU transmission operator rules mandating non-discriminatory access and gas commingling making source identification impossible.
Tone
ProceduralTopics
Key actors
EP Group, Royal Mail, IDS (International Distribution Services), Eustream, EP UK BidCo Ltd, GLS, S&P (Standard & Poor's), HM Government
Notable line
“EP Group takes its responsibilities as the custodian of this vital national institution extremely seriously …”
Key Quotes
“We can also confirm that EP Group's credit quality is viewed by S&P as investment grade. This status further demonstrates the group's strong financial resilience.”
“Royal Mail is not liable for any debt related to the acquisition of IDS by EP Group (through EP UK BidCo Ltd) or incurred after the completion of the acquisition.”
“In the very unlikely event that IDS defaulted on the Pre-Acquisition Debt, Royal Mail could be held liable as guarantor.”
“Eustream is not able to identify whether transported gas is LNG-derived or pipeline gas, nor its origin. For these reasons …”
“Eustream has not declared any dividends to its shareholders since end of 2021. EP Group has therefore not in any way relied on cashflows from the transmission of gas through Slovakia when settling the purchase of the IDS shares in May”
Source · parliament.uk record ↗