Ministers decide to sell controlling stake in Romanian Post

The Romanian government has confirmed its intention to sell a majority stake in Romanian Post. Ministers approved a formal decision last week laying out a framework for postal privatisation that will see an investor owning 51% of the share capital in the company.

The government had previously said it was looking to sell at least a 20% stake in the post.

But, working with advisors KPMG since October, the Ministry of Communications has now said it has made major changes to its privatisation strategy, headlined by the offer of a controlling stake in Romanian Post.

It said the decision to offer a 51% stake was made because it gives potential investors the right to control the finances and operating strategy of Romanian Post, encouraging the investor to put enough resources into the company to maximise the investment opportunity.

The government said that it was looking for a “substantial” capital contribution from an investor in financing the company itself, demonstrating its “seriousness, interest and commitment in the long-term”.

Dan Nica, the information and communications minister, said approving the bill setting out the privatisation strategy was an “important point” in the privatisation process.

He said the amended plans were the best way to make the most of the capital the government has in its ownership of Romanian Post.

“Recent amendments will enable an investor holding a 51% stake to invest its financial and material expertise,” the minister said. “This will result in the diversification of the company and an increase in the quality of services provided for the benefit of all customers.”

Nica added that working with consultants at KPMG, the government would now begin talks with potential investors in the coming months.

Romanian Post in its current form was established in July 1998, although it was in 1991 when the government separated its postal company from its national telecoms and radio broadcasting companies.

At present, the company is 75% owned directly by the government’s Ministry of Communications, and 25% owned by a national fund used to compensate victims of the Communist regime.

Romanian Post currently has a network of more than 5,100 post offices and a workforce of about 33,000 people.

In March 2012, the company declared that it had been back in the black during the previous six months for the first time in three years thanks to cost-cutting measures and efforts to diversify its range of products and services.