July 2, 2018 / 9:47 AM / in 19 days

UPDATE 1-Israel to sell off 40 pct its postal service

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JERUSALEM, July 2 (Reuters) - Israel plans to sell off 40 percent of its state-owned national postal service by bringing in a private investor and then listing shares on the Tel Aviv Stock Exchange, the Finance Ministry said on Monday.

A ministerial committee approved the sale of 20 percent of the Israel Post Co to a strategic investor in Israel or abroad. In a second stage, two years later, it will offer 20 percent of the company to the public, with shares to be traded in Tel Aviv, the ministry said in a statement.

After years of poor performance, Israel Post has been carrying out a major reorganisation, including changing its array of delivery centers and reducing its work force.

After losing 421 million shekels ($115 million) in 2015, mostly due to costs of a workers’ retirement plan, the company swung to a 48 million shekel profit in 2016 and earned 13 million shekels in 2017.

The government hopes that taking part of the company private will further improve operations.

“The listing will help make the company more transparent, efficient and profitable in the long term,” the ministry said.

The strategic investor, who must commit to holding the shares for seven years, will have influence in choosing the company management. If the government fails to find an investor, it could then offer the entire 40 percent stake to the public.

All together it expects the changes to improve Israel Post’s results by tens of millions of shekels a year. ($1 = 3.6597 shekels) (Reporting by Ari Rabinovitch; Editing by Tova Cohen and Toby Chopra)

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