An attempt is being made to complete an agreement on a recovery plan for Israel Postal Company (Israel Post) by the end of this week. Sources inform “Globes” that at a meeting between the parties concerned yesterday that went late into the night, considerable progress was achieved. A further meeting is scheduled for tomorrow with the aim of finalizing the last details of the negotiations, and, barring last minute surprises, it is believed that there is a chance that an agreement will be signed on a recovery plan to save the company. The cost of the plan, covering workers’ severance pay, is estimated at NIS 1.7 billion. The final sum is still subject to negotiation.
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At the same time, a tender is due to be published this week to choose underwriters for Israel Post’s equity offering. The offering is a material part of the recovery plan, and is meant to cover part of the cost of laying off workers. 40% of the company will be offered this year. The plan is for the remaining shares in Israel Postal Company to be sold to a private investor who will control the company.
Between 1,500 and 2,000 of Israel Postal Company’s 5,000 workers are slated to be laid off. The drastic downsizing is made possible by regulatory changes by the Ministry of Communications, removing many restrictions that were imposed on Israel Post. Last year, the company lost NIS 175 million and it is in severe cash flow difficulties. It is therefore in need of a rescue plan with government backing to provide security for its employees until it passes into private hands.
Representatives of the Accountant General, Israel Postal Company, the Ministry of Communications, the Ministry of Finance Budgets Division, and the Government Companies Authority are taking part in the negotiations, and the aim is to conclude them as quickly as possible.
Published by Globes, Israel business news – en.globes.co.il – on April 5, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.
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