Israel Post privatization underway

Israel Post

Initially, 20% of the company will be sold by auction to an individual investor.

The ministerial privatization committee approved the privatization of Israel Post today. Privatization was approved after feverish efforts in the past few days to reach understandings between the Ministry of Communications, the Government Companies Authority and Israel Post on a series of matters that were introduced into the privatization proposal but were not acceptable to Minister of Communications Ayoob Kara. Among them was the separation between Israel Post and the Postal Bank that the Ministry of Finance wanted but which in the end will not happen, despite the fact that the Postal Bank will become a social bank.

Under the outline submitted by the Government Companies Authority, 20% of the shares will initially be auctioned to an Israeli or foreign strategic investor.

In the second stage, after two years, a further 20% of the shares will offered to the public, and Israel Post will become a public company listed on the Tel Aviv Stock Exchange. The offering will assist the company in becoming transparent, efficient and profitable in the long term. The state's holding in the company will not fall below 60%. The private investor buying the shares in the initial privatization stage will be assured preferential rights. An agreement will be signed between the state and the buyer giving the latter a say in the selection of the CEO. The buyer will undertake to keep his stake in the company for seven years. The proposal includes the possibility of selling 40% of the company to the public in the event that the sale to a private investor does not materialize.

In consultation with the Ministry of Finance, the Ministry of Communications, and the Israeli Security Agency, the Government Companies Authority will formulate the vital interests of the state in Israel Post and the Postal Bank and how they will be maintained. In that context, the possibility will be examined of restricting the holding of a stake of 5% or more in the company without prior approval.

The company's employees will be compensated in accordance with the Government Companies Authority's procedure on compensation of employees in a privatization process.

Israel Post chairman Hezi Zaieg said, "We welcome the great confidence that has been placed in us by the ministerial committee, the Ministry of Finance, the Ministry of the Economy and Labor, the Ministry of Communications, and the Government Companies Authority, which have been in constant consultation with us. Since the collective agreement with the employees was signed in 2015, setting out the route to privatization, we have worked unwearyingly to improve our service and to improve the company's financial performance. In the past three years, we have demonstrated that Israel Post has turned from an organization that delivers letters into a logistical giant with a substantial presence in the online trading market, providing services to the international trading platforms. We shall continue to work to implement Israel Post's business strategy and to ensure the company's success."

Published by Globes [online], Israel business news - www.globes-online.com - on July 2, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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