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Israel to privatise postal service company
Israel Post underwent an austerity and recovery plan over the past year

Israel has put its postal service on the block after completing a recovery and financial stabilisation process and formulating a strategic plan for the coming years.

The state’s privatisation agency said it would sell 100 percent of Israel Post Co. to an investor or group of investors. Bids are due by September and the winning bid is expected to be announced by the first quarter of 2024.

A year ago, the government scrapped a plan to sell 40 percent of the cash strapped postal service in a Tel Aviv share offering, with the remaining 60 percent slated to be sold to a strategic investor.

Over the past 12 months, Israel Post underwent an austerity and recovery plan of reducing payroll expenses, moving to digital services and closing branches while opening hundreds of delivery centres and transferring a significant portion of its assets to the state.

“The privatisation of the mail is great news – for the economy, the treasury and much more for the general public, who will receive a more efficient, faster and higher quality service,” said Michal Rosenbaum, director of the Government Companies Authority, predicting “investors will show great interest”.

Israel Post chairman Mishael Vaknin noted that just 18 months ago the company had a going concern warning, a huge drop in market share and many disappointed customers. But under new management it had become much more efficient with the retirement of 20 percent of its workforce.

In addition to traditional mail and fast delivery services, Israel Post includes the Postal Bank, which has one million active customers. It noted that the Postal Bank and e-commerce are its main growth engines.

Israel Post also owns 278 real estate assets valued at around 600 million shekels ($162 million), it said.

In the first quarter, the company posted adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of 67 million shekels and it estimated adjusted Ebitda of 235 million shekels in 2023 after a 36 million shekel loss in 2022.