Saudi Postal Corp seeks bank advisers for privatisation – sources

Kingdom says it is likely to start privatising Saudi Postal, which has over 10,000 staff, by early 2017

The government hopes privatisation will allow the state to cease financial support for Saudi Postal. (Image: Facebook/Saudi Post)

The government hopes privatisation will allow the state to cease financial support for Saudi Postal. (Image: Facebook/Saudi Post)

Saudi Arabia has invited banks to pitch for an advisory role in the sale of Saudi Postal Corp to investors, sources familiar with the matter told Reuters.

The kingdom is launching a privatisation drive as part of wider economic reforms which aim to boost efficiency and ease pressure on state finances in an era of cheap oil.

Saudi Postal, the government-owned postal service, sent a request for proposals to local banks last month, according to bankers who spoke on the condition of anonymity because the matter is not public. No decision on which banks will participate has been made, two bankers said.

The Ministry of Communications and Information Technology did not respond to a request for comment.

Last June, telecommunications minister Mohammed al-Suwaiyal said the kingdom was likely to start privatising Saudi Postal, which has over 10,000 staff, by early 2017.

Suwaiyal said that in preparation, the government was looking at a plan to create a postal holding company which would own subsidiaries operating services such as mail, courier delivery, e-commerce and financial remittances.

Authorities were studying issues such as how much of Saudi Postal would be sold and whether the stake would be offered to the public in an initial public offer of shares or to local or foreign strategic investors, he said.

The government hopes privatisation will allow the state to cease financial support for Saudi Postal - annual government subsidies to it are projected to fall to zero by 2020 from 2 billion riyals ($533 million) now - while boosting its performance, so that its revenues rise to 2.75 billion riyals in 2020 from 1.02 billion riyals in 2015.

Related:
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

NOTE: Comments posted on arabianbusiness.com may be printed in the magazine Arabian Business

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

All comments are subject to approval before appearing

Further reading

Features & Analysis
How Ramadan has earned prime spot on Gulf fashion calendar

How Ramadan has earned prime spot on Gulf fashion calendar

From Dolce & Gabbana to Michael Kors, major brands are catering...

Focus: 'Amazon did not come to the region for Souq.com alone'

Focus: 'Amazon did not come to the region for Souq.com alone'

E-commerce experts say retailers will have to up their game following...

5
Saudis tighten their belts for Eid in age of austerity

Saudis tighten their belts for Eid in age of austerity

Gov't cuts, which began late in 2015, are now rippling through...

Most Discussed
sponsoredTracking