Saturday June 22, 2024
22-07-20

Israel seeks strategic investor for postal privatisation

Israel Post heads for privatisation
Israel Post heads for privatisation

Israel is looking for a strategic investor to buy a 20% stake in its profitable national postal operator and will later sell a further 20% to the public in a major privatisation move following a successful financial turnaround over the last few years.

The country hopes to raise up to NIS 250 million (US$73 million) through the first stage of the privatisation, which it aims to complete by June 2021. The public sale via an IPO could then follow in 2022, according to government ministers and officials.

The long-awaited move will complete a major transformation at Israel Post, which has gone from near-insolvency in 2015 to solid profits last year through a series of restructuring measures. The company is now led by a new management team, with many executives drawn from the private sector, and service quality has improved significantly.

Israel plans to re-invest the bulk of the privatisation proceeds into the postal operator to finance investments in new products and services as it aims to profit from the boom in e-commerce, develop financial services and expand logistics activities.

David Amsalem, Digital Minister, told a press conference last week: “The privatization of Israel Post is one of the most significant moves in a series of privatizations we are leading among government companies.”

Communications Minister Yoaz Handel emphasised: “In light of the increase in package orders and online commerce, privatization and bringing a private investor into the postal company is a critical move.”

Hezi Zaig, Chairman of Israel Post, commented: "This is a historic day and we thank the Government Companies Authority for its great trust in us. This is not the beginning of the journey, but a continuation of a long road we have been leading for five years.”

CEO Danny Goldstein explained: "Israel Post is one of the significant players in the field of online commerce and the largest logistics operator in Israel. In recent years we have changed from an operating company to a services company, we have undergone a strategic change, and from a geographical structure to business divisions focused on the company's core areas.”

The CEO continued: “We are in the midst of the Corona period, a difficult period in the field of service, where we face new regulations and challenges. Even during this period, we continue to provide continuous service everywhere.

“In recent years, we have opened hundreds of parcel delivery centers in cooperation with small and medium-sized businesses, and during the Corona period some of them had significant support for those businesses. Today we offer the largest retail chain in Israel with more than 1,300 service points everywhere in the country."

Goldstein highlighted recent investments in post offices, sorting technology and final-mile delivery points.

In 2019, Israel Post made an operating profit of NIS 47.2 million on turnover of NIS 1.84 billion and invested NIS 150 million in technology and infrastructure.

SourceIsrael Post, international media, CEP-Research
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