Govt could recapitalize Russian Post to reduce debt - director

MOSCOW. Jan 27 (Interfax) - The Russian government is thinking of recapitalizing JSC Russian Post to reduce its debt, the company's head, Mikhail Volkov, said during a meeting of the Federation Council's Economic Policy Committee. He also said Russian Post had done much to raise funds, costs and improve efficiency in the last three years, but these were not enough to tackle systemic issues affecting the company.

Debt reduction and recapitalization

He said the government was looking at a package of measures and initiatives to develop Russian Post, including ways to address the company's previously accrued debts.

"Although we've managed to reduce our debt significantly by improving internal efficiency, the increase in the key rate means the company spends over 20 billion rubles annually on debt servicing alone. This is money we could have used to increase wages, and refurbish and modernize our branches, infrastructure and fixed assets," Volkov said.

"So various recapitalization options are being discussed to ease the debt burden. A meaningful discussion of all these decisions is underway at the government level, led by [Deputy Prime Minister] Dmitry Yuryevich Grigorenko. I very much hope that all these decisions will be reached in 2026," Volkov said.

He said that Russian Post had managed to reduce costs by more than 17 billion rubles before inflation over the past three years.

The board of directors in November 2025 decided in favor of increasing charter capital by issuing 16 million additional ordinary shares at 1,000 rubles per share in a private subscription in favor of the Federal Property Management Agency (Rosimushchestvo), Russian Post's sole owner.

According to reporting for 9M 2025, Russian Post's charter capital is currently 94.3 billion rubles, consisting of 94,279,394 ordinary shares, par value 1,000 rubles each. This will rise to 110.3 billion rubles if the new shares are issued.

Russian Post, formerly a federal state unitary enterprise, was corporatized on October 1, 2019. It has more than 38,000 post offices.

Fundraising, cost cutting

Volkov also said Russian Post had managed to raise more than 50 billion rubles by selling non-core assets in the last three years.

It had also cut costs by more than 17 billion rubles. "That's without adjustment for inflation which has been way above 40% over the three years, especially in logistics services," Volkov said.

Russian Post has spent more than 27 billion rubles of its own money on increasing wages for core staff and more than 16 billion rubles to support and develop infrastructure.

The efficiency drive had boosted labor productivity more than 50% in the period, "an absolute record not just for Russian Post but for the market as a whole," Volkov said.

Russian Post has offset a drop in revenue for traditional postal segments by developing new and commercial lines of business, doubling the development of its electronic mail system, and expanding commercial logistics services for e-commerce market participants.

"As a result of this, the company has turned an operating profit. It has had operating profit for three years now. Losses and debt have been reduced," Volkov said.

He also said that in the three years, more than 3,000 post offices in rural areas had been updated, and a modernization program through 2030 had been drafted. "The government is looking at funding for this program. The 2026 budget has not yet been finalized," he said.

"Of course, there's a lot left to do and there are a lot of issues and problems. But we understand, and we are discussing it with the government, that measures to improve internal efficiency alone are insufficient to resolve the systemic issues and problems facing Russian Post Office," Volkov said.

Russian Post's revenue to International Financial Reporting Standards fell 4.2% year-on-year to 53.5 billion rubles in Q3 2025. Operating profit soared nearly 7-fold to 5.2 billion rubles. Net profit rose 3.6-fold to 10.3 billion rubles in the quarter but net losses widened in January-September, by 43.9% to 13.5 billion rubles.

Higher prices

The government is also thinking of putting the price of postal services up except for eligible, social categories of citizens. "These have not been sufficiently indexed in recent years," he said.

This issue of low tariffs has been raised before. Volkov said in the spring of 2024 that Russian Post was keeping prices for essential postal services in Russia flat, "that is, mailing a letter from Kaliningrad to Pevek will cost the same as in Moscow." At the time, Digital Development Maksut Shadayev proposed a return to state subsidies for the company's essential services, as their rates were below breakeven. He said the regulator could not increase Russian Post's rates, as the company fulfills a social function by providing a guaranteed range of services throughout the country.

Shadayev said in February 2025 that delivering magazines and newspapers was an uneconomical business for Russian Post, despite price growth for this service remaining below the rate of inflation since 2020, while the cost of the publications themselves had increased by 1.5-2, and in some cases even 4-fold. The Federal Treasury ordered price increases for these services following an audit of the company, the minister said. The Digital Development Ministry proposed to double prices for delivering periodicals in general while preserving the discount for delivering socially important publications. Russian President Vladimir Putin later asked the government to provide Russian Post with budget subsidies in 2025 for the delivery of socially important federal, regional and municipal periodicals.

Other initiatives

Volkov also said the government was discussing enshrining in law Russian Post's status as the state operator for the delivery of legally significant correspondence, not only in paper form but also electronically. This, he said, would "eliminate alternative delivery methods and keep this under state control and in the interests of citizens, ruling out any fraudulent and other schemes."

Measures to "bring order" to parcel delivery are also being discussed with the government.

"The state and regulators have historically determined the key requirements for this type of business, taking into account the need to safeguard constitutional rights to the privacy of communications, mail tracking and a range of measures to prevent the delivery of prohibited items. Unfortunately, it has to be said that the market situation today is such that these requirements are currently being imposed only on Russian Post. We see a lot of private operators operating in what is essentially a licensed business, without a postal license, without complying with all these rules and requirements. And here too we are discussing a range of measures and solutions with the government to, let's say, restore order in this sphere," Volkov said.