Sources inform ''Globes'' that the Ministry of Finance has valued Israel Post Ltd. at NIS 1 billion for the purpose of the company’s privatization. An external consulting firm valued the Postal Bank at around NIS 100 million only. Last September, the government decided to privatize Israel Post through an IPO followed by the sale of the controlling interest to an investor.
Israel Post has a very large nationwide network, many real estate properties, an expensive equipment infrastructure, and currently has a monopoly, although the market is gradually being opened.
Israel Post has an estimated NIS 1.6 billion in annual revenue, and has no loans. Revenue from bulk mail, Israel Post’s core business, was NIS 800 million in 2005. However, Israel Post has already lost half the bulk mail market to competitors, and the Ministry of Finance predicts that competition will intensify in July 2007.
Israel Post is streamlining, partly in response to the opening of the market to competition, and plans to cut 500 jobs over the next three years. The government has promised to allocated NIS 425 million to Israel Post over three years for the retirement agreement with postal workers.
Under Israel Post’s business model, the company will lose 15% of the bulk mail market in the first year of competition. At the same time, the company wants to develop new services that will expand its sources of revenue, such as financial, insurance and added value services.
Published by Globes [online], Israel business news - www.globes.co.il - on November 23, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006