TALLINN - Government ministers are toying with the idea of either selling Eesti Post, the state-owned mail company, or merging it with a foreign competitor as a way to offload the loss-making enterprise. Several foreign companies have reportedly expressed an interest in a deal, according to reports.
Though no specific plans have emerged, there seems to be a consensus that the state-owned postal service needs to be restructured.
Economic Affairs Minister Juhan Parts and Meelis Atonen, chairman of the supervisory board of the mail company, have repeatedly stated that the government needed to create a new ownership structure for Eesti Post 's whose finances have been in the red for some years 's that reflects the changing times.
Atonen said that no one has been wooing Eesti Post yet, although there were interested parties, mainly from Scandinavia, eyeing the asset.
"We cannot be specific before the Economic Affairs Ministry has made its analysis and the government its decision," Atonen said. "It is not important to whom the company belongs but that it does its duty."
Finnish mail operator Itella, as well as Sweden and Denmark's mail companies, have been mentioned as potential investors/partners.
According to an EU directive, postal services in all member states must be deregulated in several years' time. State-owned postal companies have largely enjoyed monopoly status, though this has not saved them for racking up losses.
Latvia's postal company, Latvijas Pasts, lost a staggering 10 million lats (14.2 million euros) last year and has become a major bone of contention in the ruling coalition.
Ahti Kallaste, recently appointed board chairman of Eesti Post, warned that major European postal operators could flock to Estonia and create profound difficulties for Eesti Post.
Remarkably, Eesti Post saw some red in the first quarter after earnings reached 6 million kroons (380,000 euros), the company announced last month. Managers said results depended on seasonal and one-off factors, such as Christmas and elections.
Earlier the company announced it would close 95 post offices by Aug. 1 and lay off 250 employees. It closed 44 post offices in 2007.
Eesti Post currently has 495 post offices. It employs 4,100 people, though managers said it needed to cut the number to 3,500.
Last year Eesti Post posted a loss of 34 million kroons on sales of more than 900 million kroons.
