Friday, September 21, 2012

Going Public

In the corporate world, one of the best ways to raise capital needed for the expansion of operations is by completing an Initial Public Offering. Through an IPO, corporations sell chunks of their ownership to the public. The public gets the opportunity to enjoy a stock price increase if the company is successful and the company itself gains the money to promote its growth. The process is lucrative enough for China Post Group to consider it for two of their subsidiaries.

China Postal Express & Logistics Co has already filed a prospectus (financial status report for potential investors) for an IPO sometime this year. The company, responsible for domestic and international package services, hopes to raise $1.6 billion from the process to fund the purchase of additional trucks, airplanes, distribution centers and personnel. The infusion of cash is intended to improve both operations and management of the company and make it more competitive in a market packed with rivals.

On a similar IPO path is the Postal Savings Bank of China. Their primary goal is to service the financial needs of individuals and small businesses. The additional capital will allow them to expand their operations and service more loans.

Is an IPO something the USPS should consider for some its business segments?

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