Khazanah wants to sell its 32.21 per cent stake in Pos Malaysia – soon after postal tariffs were substantially hiked. What’s the rationale?
Why raise tariffs so much from 1 July and then sell its stake? Shouldn’t the profit from the higher tariffs remain in government hands instead of transferring the immediate benefit to private hands or other entities?
It’s not as if the postal company is losing money. Not by a long shot. Despite all its inefficiencies, Pos Malaysia posted a profit before tax of RRM109 million for the year ended 31 December 2009 – up from a loss before tax of RM0.5 million the previous year.
Its profit from operating activities in 2009 was RM82 million (on the back of turnover of RM902 million), only slightly down from its operating profit of RM86 million the previous year (turnover RM922 million). Its current assets exceeded current liabilities while its ‘cash and cash equivalents’ stood at RM318 million.
Khazanah, which comes under the Finance Ministry, is inviting bids for its 32.21 per cent stake, the Edge weekly has reported. (The company handling the pre-qualification exercise for the bids is CIMB Investment Bank.) Apparently the bidders have to be 51 per cent owned and controlled by Malaysians.This could see the entry of foreign players as partners with a local company. The condition is that Pos Malaysia has to strike a balance between making profits and fulfilling its social obligations.
But why sell in the first place, when Pos Malaysia is set to make even higher profits after the huge tariff hike?
Maybe it is thought that with the growing use of email and online bill payments, the postal business is a fading proposition. But Pos Malaysia is sitting on a gold mine: it has 697 branches – think of the property value and the reach, which is more extensive than any bank. That is a huge advantage for any firm. Much will depend on how this is valued.
All it needs is a new model that would improve standard mail and courier services and introduce new services that could take advantage of its reach. Given the trend towards online shopping, Pos Malaysia could offer online mail order deliveries and charge businesses a fee for delivering. Its network would also come in handy in various government exercises such as voter registration and payment of petrol rebates to the public. In fact, Pos Malaysia could be turned into a one-stop public service centre that could bring the government delivery system within reach of the people.
Why sell such a potentially useful, even lucrative network? If foreign expertise is needed, why not hire experts to look into streamlining the postal services instead of selling the stake in Pos Malaysia?
Watch carefully how they value this stake in Pos Malaysia.