JERUSALEM (Reuters) – Israel intends to fully privatize its national postal service through a combination of a Tel Aviv share offering and other steps, including a possible sale to a private entity.
Communications Minister Yoaz Handel said 40% of Israel Post Company’s stock would be sold in an initial public offering on the exchange and the rest of the state’s shares would be settled through a private sale, IPO, or a combination of both.
The outline was agreed upon by Israel’s finance minister but no timetable was announced.
After years of poor performance, Israel Post is undergoing a major restructuring, which includes changing its array of distribution centers and reducing its workforce.
The government has said that it expects further improvement in operations by taking part of the private company.
Handel said he has proposed reforms, including reducing regulation, expanding competition in the letter-shipping sector, advancing the transition to digitization, changing the way price controls are conducted, and higher fines for violating license provisions.
“The letter market is fading while the package market is growing,” he said. “The time has come for a change in the postal service.”
He said that complete privatization of the postal company is the only long-term solution to the structural problems of the postal company.
The ministry said the 2018 plan for partial privatization, which would include a 20% sale to a strategic investor and a subsequent IPO of 20%, was not sufficient. As long as the state remains under control, it will have to keep injecting millions of shekels every few years, it said.
In the first half of 2021, Israel Post lost 64 million shekels ($21 million), compared to a loss of 163 million a year earlier. In 2020, it lost 643 million shekels – partly due to a one-time charge – compared to a 29 million shekel gain in 2019.
($1 = 3.1103 shekels)
Reporting by Steven Scheer; Editing by Amelia Sithol-Mataris
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