The Ministry of Finance wants to sell 30% of Israel Postal Company Ltd. through the Tel Aviv Stock Exchange (TASE) at a company value of NIS 1.5 billion. The Post Office would use the NIS 450 million proceeds to strengthen the Postal Bank, to create the necessary equity for business and establishing the necessary personnel, computers, and other infrastructures.
Ministry of Finance officials say that there are two necessary conditions for the Postal Bank to get on its feet: tier-1 capital, which can be obtained through privatization; and economically viable current activity.
The Ministry of Finance supports in principle the idea of a "social bank" that Minister of Communications Moshe Kahlon is planning. The Postal Bank would be able to address the market failure in pension savings by allowing the sale of pension products to the poor.
The Ministry of Finance cautions, however, that since the Postal Bank lacks the necessary infrastructure, such as licensed pension advisors and a suitable computer system, an IPO should be carried out as soon as possible, simultaneously with an amendment to the Postal Law, to finance the necessary activity.
Under the Ministry of Finance's proposed Post Office privatization plan, prepared several months ago, 30% of the company will be sold initially, followed by an additional 19%. The other 51% of the company will be sold to a strategic investor.
Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010