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Poland's post office rejects IPO plans in strategy shift
April 18, 2017 / 11:43 AM / 5 months ago

Poland's post office rejects IPO plans in strategy shift

WARSAW, April 18 (Reuters) - Poland’s state-owned postal group Poczta Polska on Tuesday announced that it has rejected plans for an initial public offering (IPO) and will focus on expanding its parcel delivery business.

The company’s strategy had been flagged last year by a deputy minister overseeing the company as the government seeks to make good on a promise to curb privatisation and strengthen large state-run enterprises.

“The plans to float the company, which were present in the previous strategy, have been rejected,” Poczta Polska said, adding that it aims to double revenue from parcel delivery services and achieve a 400 percent increase in revenue from logistics services by 2021.

The decision is in contrast to Italy’s move last year to allow the sale of up to 30 percent of Post Italiane in a privatisation programme to cut public debt.

Since Poland’s right-wing Law and Justice (PiS) party came to power in 2015, Poczta has won back the contract to deliver letters from Polish courts, helping the company to achieve its first revenue increase for years in 2016.

Poczta had come under increasing pressure as its traditional postal operations were squeezed by intense competition from rapidly growing private delivery services.

The new strategy assumes that Poczta’s annual revenue will rise to about 6.9 billion zlotys ($1.74 billion) by 2021, from 5.5 billion in 2016, with the contribution from traditional letter delivery shrinking to 37 percent from 58 percent.

Poczta Polska also said it wants to become a logistics operator in e-commerce between China and the European Union.

“Taking into account ... the competitiveness of Chinese products ... and the geopolitical location of Poland, Poczta Polska has a chance to become a logistics operator on the New Silk Road,” the company said.

The New Silk Road is part of China’s One Belt, One Road initiative to boost trade with Europe, Asia and Africa. ($1 = 3.9685 zlotys) (Reporting by Bartosz Chmielewski; Writing by Marcin Goettig; Editing by David Goodman)

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