Privatization seen as a long-term solution to structural problems and deficiencies in Israel Post
Israel’s Communications Minister Yoaz Hendel has said Israel Postal Company, the country’s government-funded postal service, will be 100% privatized.
The move comes with deals already made with postal workers, though officials failed to mention how employees would be paid, the Hebrew-language financial newspaper Globes reported.
A series of talks between the Ministry of Communications and the Ministry of Finance, with cooperation from the Government Companies Authority, led to the decision to sell 100 percent of the state’s stake in the company.
Officials see full privatization as a long-term solution to the structural problems of the Israeli postal company and the deficiencies in postal services to the public.
An initial offering of 40 percent of the company’s shares will go on the Tel Aviv Stock Exchange, while the state encourages the sale of the remaining shares either privately or as part of a public offering.
If the public offer does not prove feasible, a private sale of 100 percent of the company will be considered.
According to Globes, balancing the sale of shares to private investors would require an injection of millions of dollars in severance pay.
“Since taking office I have been warned not to touch Israel Post,” Hendel said.
“Today we are embarking on a new path in the postal services market in Israel. We are opening it up to competition, reducing regulation and introducing historic reform in the Israeli post office. “
Hendel added that the change “will usher in a new era of high quality, efficient and advanced postal services for Israeli citizens”, Globes reported.
According to the valuation made during the privatization decision, Israel Postal Company is worth more than $ 385 million.