The Ministry of Finance and the Ministry of Communications, the Government Companies Authority, the management of Israel Postal Company (Israel Post), and representatives of Israel Post workers, have agreed on the principles of a recovery plan and the privatization of the company.
The recovery plan includes downsizing and cutting salary costs, an accelerated transition to digital services, high priority for parcels collection, a special service for elderly people lacking digital skills, geographical redistribution of postal services, and competition in the postal market.
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The state will lend Israel Post NIS 1.7 billion, while the company will undertake to sell assets to the tune of NIS 450 million.
Between 1,500 and 2,000 of Israel Post’s 5,000 employees will leave, with a state guarantee for their severance pay.
The question of selling real estate assets of the company is a complex one, as the real estate makes the company more attractive to investors. The government argues however that the company needs a strategic investor able to run it efficiently, and not someone looking to make a killing on its real estate. The state is therefore willing to take the risk upon itself, even at the expense of the proceeds from the planned equity offering and the privatization process being lower because of the sale of real estate assets.
Published by Globes, Israel business news – en.globes.co.il – on April 7, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
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