NATIONAL NEWS - The South African Post Office (Sapo) needs a further R3,8 billion in funding from National Treasury in order to fully implement the approved business rescue plan which started in July 2023.

This is in addition to the R2,4bn received from the treasury last year, according to a media statement issued by the Post Office's business rescue practitioners (BRPs) on Tuesday 3 September.

On the same day, Sapo acting Chief Financial Officer Fathima Gany updated Parliament on the envisaged future of the Post Office, should additional funding not be procured.

Netwerk24 reports that Gany referred to a "Day Zero" for cash reserves that would arrive in October, and she warned that without capital investment from the fiscus, the organisation is on the brink of liquidation.

If no additional funding is secured, the BRPs will be forced, in terms of Article 71 of the Companies Act, to put Sapo under liquidation. 

Gany said that would be the last nail in the coffin for Sapo as it will be placed in the hands of the master of the High Court, who will appoint a liquidator to finalise the estate. The liquidator would become Sapo's final authority. All employees would lose their work, business activity would stop and assets sold so that any yields could be distributed among the creditors.

Netwerk24 also quotes Department of Communication and Digital Technology Director-general Dr Nonkqubela Thathakahle as having said that they are in constant communication with National Treasury about the outstanding R3,8bn, after two applications to Treasury failed.

Sapo says in its statement that the BRPs have managed to stabilise the business and have made progress on cutting costs by rescaling. 

Liabilities have been decreased from R8,7bn from July last year to R440m in June this year. "As a result, the net asset value (NAV) has improved to a positive R840 million from the deficit of R7,9 billion at 30 June 2023.

"Secured creditors supported the write-off of 88% of the amounts owed to them, which has reduced the Post Office’s debt burden. By 31 July this year, 98,6% of all creditors had been paid a compromised 12c in the rand or 12% of the amount owed to them, totaling R842 million. 

Statutory and payroll creditors (Sars, Post Office Retirement Fund and Medical Aid Schemes) will be paid a further 18 cents dividend upon receipt of the R3,8 billion funding from the fiscus."

Further operational and sales activities were undertaken to support the business. These included migrating the key system applications and hardware to a new data centre, which stabilised the connectivity and IT operations, and comprehensively overhauling the automated sorting capabilities to ensure cost-efficient and effective mail handling in large mail centres. 

An internal committee was constituted to focus and comply with international postal obligations and as a result international and African mail backlogs have all been cleared. Domestic mail backlogs has been reducing since the commencement of business rescue and mail is moving frequently.

To support the delivery of mail and parcels, a multi-modal approach to ‘last mile’ delivery has been adopted. A combination of walking, bicycles, motorcycles and vans are being used to optimise routes and delivery. Some 422 leased vehicles have been dEployed to move mail and postmen to delivery depots and to make street deliveries.

Joint BRP Anoosh Rooplal said: "An important reminder is that the reason and efforts made to restructure this business are based on the fact that the Post Office has a social mandate that requires it to serve all South Africans."

He said they are considering mutually beneficial partnerships for the Post Office, as laid out in the BR plan.

An internal investment committee has been constituted and partnership protocols have been established. Already, one partnership has been agreed, with Ethiopian Airlines in 2023. The partnership has cleared the international mail back log and resumed mail connections to international destinations.

"The BRPs are actively pursuing strategic partnerships with various state organs to revitalise the Post Office’s operations from government-to-government business, enhance service delivery and unlock new growth opportunities. They are also pursuing partnerships that will help to improve the 'last mile' of delivery, support digital inclusion, and will lead to property upgrades. They are examining opportunities to repurpose buildings and provide built-in services to small retailers in areas where a branch may not in itself be commercially viable."

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