Portugal completes sale of CTT Group

The Portuguese government has this month completed its privatisation of the national postal operator, CTT Group. The country’s state holding company, Parpública, has said it has sold off its remaining 31.5% stake in CTT Group, or just over 47.2m shares.

The sale raised EUR 343m at the going rate of EUR 7.25 per share.

It has meant that the Portuguese government has made a total of EUR 909.2m from the flotation of the company.

The first phase of the sale came in an IPO back in December 2013, when a 70% stake of the company — 105m shares — was sold for about EUR 580m. This included a 60% stake sold to institutional investors, with 5% offered to workers at a discount rate.

This second phase came after the government’s pledge of holding on to part of CTT Group ran out in August.

Parpública said the second phase saw an accelerated book building process for shares to be sold to international investors.

“The model adopted by the government was considered the most advantageous given the market conditions,” the agency said.

The privatisation of CTT Group, along with the sale of state-owned companies including energy firms EDP and REN and airports operator ANA, was part of a requirement of the European Union’s bailout of the Portuguese economy.

CTT Group has around a 95% share of the Portuguese postal market through its Correios de Portugal brand, but is dealing with a 9% annual decline in its mail volumes.

The company’s express parcels unit, CTT Expresso, has a market-leading 28.7% market share.

CTT Group generates about EUR 714m in revenue each year, but it has been declining for about five years. This year’s first quarter saw financial services and parcels growth offsetting the mail business decline to stabilise revenue and profits for the first time in years.