Israel to sell postal service to private investor instead of Tel Aviv IPO
Israel on Sunday opted against a Tel Aviv public offering of its financially strapped postal service, instead putting up all of Israel Post Co for sale to a private investor by 2023.
Communications Minister Yoaz Hendel said Israel's privatisation agency will aim to complete the sale within 16 months.
"Keeping to the schedules and bringing in a private investor with a business orientation will lead the company to efficient management, improve postal services for the Israeli public and adapt it to the current era," Hendel said in a statement.
In April, Hendel -- Israel's telecoms regulator -- had said the state aimed to sell 40% of Israel Post in a Tel Aviv share offering by the end of 2022, and to cut 1,600 jobs, as part of a plan to save the service from collapse.
The remaining 60% stake was slated to be sold to a strategic investor by mid-2023.
A month ago, Israel Post's board approved an austerity and recovery plan of reducing payroll expenses, moving to digital services, closing branches while opening hundreds of delivery centres and transferring a significant portion of its assets to the state.
After years of poor performance, Israel Post has been carrying out a major reorganisation, including changing its array of delivery centres and reducing its workforce.
Nonetheless, the company posted a cumulative operating loss of 1 billion shekels ($290 million) between 2016 and 2021 as the market changed and customers use the post less.
As long as the state remains in control, it will have to keep injecting hundreds of millions of shekels every few years, Hendel has said.