Privatization of 25–50% of the shares of Ukrposhta JSC is possible after the war in Ukraine

Privatization of 25–50% of the shares of Ukrposhta JSC is possible after the war in Ukraine

Igor Smilyansky, General Director of Ukrposhta JSC does not rule out partial privatization of the company through the sale of a minority stake of 25-50% of shares after Ukraine’s victory in the ...

“I would really like that after victory or near victory, we would become one of the first companies that would carry out a successful, cool privatization of at least a block of shares. We are ready for this. We are already a joint-stock company, that is, the state has 100% shares that she can sell at any time,” said Igor Smilyansky.

As potential buyers, he indicated large financial institutions such as the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the International Finance Corporation (IFC), “who will want to support privatization in Ukraine and then sell their stake, possibly , for IPO."

In addition, according to him, a strategic investor could also purchase a stake in Ukrposhta, who would help the company increase its capitalization and, in a few years, would leave its shareholders by selling shares on the stock exchange of a pool of funds, including pension funds.

Igor Smilyansky noted that private equity and venture funds could become owners of part of the shares of Ukrposhta, since logistics and parcel delivery will be a promising area for many years, which cannot be transferred to a remote format.

"Other possible investors are companies like DHL, or Amazon, which may be considering entering the market. And one of the possibilities for entering the market is to acquire an existing player," he said.

According to the CEO of Ukrposhta, it is advisable to sell the company’s shares in parts, since a 100% sale will not be accepted “neither politically nor by people.”

"The first sale, I think, should be 25%, then 49%, perhaps 50%. A campaign like Ukrposhta cannot be privatized entirely, because it will not be accepted either politically or by people. It is necessary to sell in parts and show “An investor came in, they just got better, nothing bad happened - let’s see, maybe it’s worth privatizing the other part,” said Smelyansky.

At the same time, he noted that it is unlikely that at the time of sale the company will be able to achieve a capitalization equal to DHL, in particular due to the size of the postal services market in Ukraine and low tariffs.

“In no European country can you send a parcel by express the next day for a dollar. In Ukraine this is possible thanks to competition,” he noted, emphasizing that at the time of sale “there will be a certain capitalization.”

One of the directions in preparing Ukrposhta for partial privatization in the future, according to the general director, will be a reduction in the share of income associated with the state.

“When I came to Ukrposhta, the share of income associated with the state was 60%. What do I mean by “associated”? Associated is when the state regulates tariffs, for example on letters or newspapers, or when the state pays for services , for example, for the delivery of a pension, this share was 60%, today it is 38%, and I really hope that if we are successful and gain the right to banking, then within two years this share will drop to 8%," - said the CEO of Ukrposhta.

Related posts