Israel Postal Company and the Ministry of Finance have signed an agreement on a recovery plan for the company, and a collective labor agreement has been signed with the employees’ representatives and the Histadrut. The cost of the agreement is NIS 1.7 billion, and much of it is dependent on a change in the license of the company, which is insolvent, and on the Knesset’s approval for the change.
The agreement on the recovery plan was signed after long months of negotiations, and finds the company in a difficult financial position, with losses in the hundreds of millions of shekels annually and substantial cash flow challenges. The agreement involves the sale of part of the company’s real estate to the state.
Under the agreement with the employees, 1,050 employees will leave the company, hundreds of them within the next few months. The state will lend the company up to NIS 400 million to support its cash flow, and if necessary will provide up to NIS 180 million more. Hundreds of mailmen and mailwomen will become dispatch workers supporting the parcels service.
Ministry of Finance director general Ram Belinkov said, "The recovery agreement will open the way to Israel Postal Company setting out on a new, healthy path, and will enable the company’s management to bring it to breakeven with a view to full privatization as quickly as possible."
Published by Globes, Israel business news - en.globes.co.il - on September 20, 2022.
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