Italy aims to raise €4bn with flotation of post office

Italy will fire the starting gun on the flotation of its 153- year-old national post office in early August, kicking off a widely anticipated €12 billion privatisation programme.

The plan, to raise about €4 billion from listing a 40 per cent stake in Poste Italiane on the Milan stock exchange in October, is the main plank of prime minister Matteo Renzi’s stalled drive to sell off state assets.

The programme had been billed as the biggest privatisation push since the late 1990s, when Italy sold stakes in energy groups Eni and Enel.

Debt relief

The money raised from listing the post office will be used as debt relief, although it will barely make a dent in Italy’s €2.2 trillion national debt, equal to 132 per cent of its gross domestic product.

However, Italian officials and bankers said it has significant symbolic value, coming in a moment of volatility in the euro zone when Italy is showing the first signs of pulling out of a three-year recession.

"Poste Italiane is a good proxy for Italy," said Fabrizio Pagani, head of the office of the treasury minister.

Bringing to the market flagship Italian state companies, including Poste Italiane, Italian railway group Ferrovie dello Stato and air controller Enav, which have also been earmarked for partial sale, "means to make these companies stronger and more competitive" under the scrutiny of international investors, he said.

Poste Italiane is a national behemoth, with €4 billion in annual revenues, €420billion in postal savings deposits, 145,000 employees and a business that straddles logistics, savings and insurance.

Mail decline

Like other postal operators, however, it is suffering a steep decline in its traditional mail business hitting profit targets.

In 2014, Poste Italiane recorded operating profit of €694 million, down from €1.4 billion in 2013, and net profit of €212 million, down from €1 billion in 2013.

– (Copyright The Financial Times Limited 2015)