Esat buys PostGEM for £115m
THE £115m sale of An Post's loss-making internet subsidiaries PostGEM/Ireland On-Line to Esat Telecom has cleared the way for the state's postal service to seek a strategic partner.
An Post chairman John Hynes said the sale of the subsidiaries released significant capital for the company as it faced up to increasing competition in the market. They had an infrastructure deficit, and were underinvested.
``An Post has to invest heavily,'' said Mr Hynes, ``if it is to survive and prosper in the years ahead.'' There would be major developments within the market over the next two years, he said, and if it was in the best interests of the company, the country and the postal service to form an alliance, they would not rule that out.
The sale was welcomed by Minister Mary O'Rourke, who attended yesterday's official announcement of the deal.
``An Post is facing into new competitive challenges in the emerging liberalised market,'' she said, ``and the use of some or all of the capital proceeds from this sale will allow An Post to achieve its plans for major capital investment, including investment in the rural post office network.''
Esat chairman Denis O'Brien said the acquisition would speed up the process of growing their market and bringing the company to profitability. ``We're building up revenues,'' he said.