Romanian Post to cut 600 jobs

Romanian Post needs to slim down its work force by 600 and close 135 post offices by the end of April, under an agreement between the Romanian government and the IMF.

The agreement came after teams from the World Bank, European Commission and International Monetary Fund visited Bucharest at the start of this month to review Romania’s economic programme, which has been funded by EUR 3.5bn from the IMF.

A statement from the IMF said last week that state-owned enterprises in the country are in “urgent need of reform” to make them more efficient.

These reforms should use the sale of minority or majority stakes to fund reforms, introducing private-sector management, said the IMF.

Romanian authorities are intending to sell a minority stake in Posta Romana early in 2012, they told the IMF at the recent meeting, while private management is also to be introduced.

So far under agreement with the IMF, Posta Romana has already reduced its branch network in size from 7,100 at the end of 2010 to about 5,800 at the end of last year, under a new restructuring plan. Back in November, the company said it cut its operating costs last year by 13% compared to the year before.

The Post is set to publish a prospectus seeking a buyer for its minority stake by the end of this month, with hopes to finalise a sale of at least a 20% stake by the end of April.

A management board complete with private sector representation will be appointed soon after the sale, “in close cooperation with the new shareholder”, according to the IMF agreement.

The IMF said in a press statement regarding its negotiated agreement: “Strategies are being implemented to reduce arrears and put the state-owned enterprises on a sound financial footing.

“A strong regulatory framework will be important for ensuring reasonable prices in case of partial or full privatization of some state-owned enterprises,” it added.

Source: Post and Parcel