Ltvijas Pasts Postal Co must be sold off
The government should sell off Latvian postal operator Latvijas Pasts (LP), the company’s board chairman believes.
“I have always said — if someone approaches the government with a proposal to buy LP now, when its value is close to the maximum, then this should be done as follows — that’s how much it costs, let’s arrange an auction and sell it to the bidder who offers the highest price,” says the company’s board chairman Gints Skodovs in an interview published in the newspaper Dienas Bizness (DB).
Speaking about potential buyers, he told the newspaper that the Finnish Post is not interested in buying LP. “It is easier and cheaper to invest dozens of millions and create the system from a scratch. If they buy our company, they would receive a whole lot of problems they would have to solve. The main of them is that LP has a thousand of post-offices, two thirds of which are loss-making. LP employs nearly 8,000 people. Why would anyone need to get all these problems?” he said.
Skodovs also reminds in the interview that the government is against the privatization of LP. “We have done the evaluation of LP, which shows that the rise in the company’s value has grown by 18 million lats (EUR 25.61 mln) over the past three years (the value of the company stands at about 54 mln lats – DB). And by 2009, when the monopoly is over, we can make it even more valuable, which will continue to have an effect on the company’s value”, the head of the company said.
According to Skodovs, the end of monopoly means that anyone will be able to enter the market, for example, Deutsche Post (DP) with its enormous financial resources, and LP will not be able then to survive the competition. The head of the company also mentions the British Royal Mail as a potential player that might enter the Latvian postal market. According to him, for the companies like these to buy LP means “to pay a few nickels, but, instead of spending more than 50 million lats, I think that, having analyzed the situation, they will realize that it is cheaper to create a new system, which would cost just about 10 million lats, but which would not be burdened with the old problems”.
Meanwhile, Latvian Transport Minister Ainars Slesers has reminded the newspaper that LP is not available for privatization, therefore it is not the right time to speak about it. “At the moment a selloff is out of question, but a debate should be opened indeed. However, it will not begin until the question about the further strategy of the company is resolved”, he said.
Currently the government is the sole owner of the postal company.
(EUR 1 = LVL 0.7028)
Riga newsroom, +371 708 8606, [email protected]
