Israel's Government Companies Authority will meet next week to kick-start the privatization process for the Israel Postal Co. Participating in the meeting will be the Israel Postal Company's chairman and CEO as well as the director-generals of the Ministries of Finance and Communications, so that they can form a forum of decision makers to ensure that the process is successful.
In its invitation to the meeting's participants, the Government Companies Authority said that it wants to stress the speed of implementing the process, maximize the value of the sale, and continue providing services during the period leading up to the completion of privatization. After the process is presented to the meeting's participants, various teams will start working (some are already working) and the Government Companies Authority will present its privatization plan to the Israel Postal Company's board of directors.
The privatization of the Israel Postal Co. is part of the government's recovery plan for the company. In June the Ministers of Finance and Communications agreed the recovery plan, which includes a NIS 1.7 billion loan, with the company committing to sell assets worth NIS 450 million, with the balance coming from a public offering and privatization.
As part of the process, the ministers decided to sell the government's full holdings in the Israel Postal Co. instead of splitting the process through an offering and a sell of the controlling core. The aim is to allow a private investor to fully manage the company, and so the government agreed to bear the costs of the recovery plan, without which an investor would not acquire the company, due to the heavy compensation costs to the employees being laid off.
Next week, the Israel Postal Co. will publish its financial results for the second quarter of 2022, with an expected loss of NIS 80-100 million. The company is expected to lose about NIS 250 million in 2022.
Published by Globes, Israel business news - en.globes.co.il - on August 25, 2022.
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