Durban — Based on recent financial projections, at the current rate and with no further capital injections by the fiscus, the South African Post Office (Sapo) will only have cash reserves up to next month.
A discussion around Sapo was held on Tuesday at a portfolio committee meeting on Sapo’s business rescue developments.
A report stated that “Day Zero” would occur in October 2024 and with it fast approaching, the business rescue practitioners were obliged to consider the provisions of Section 141(2) of the Companies Act 71 of 2008. If there were no longer reasonable prospects of rescuing the company, the practitioners must apply to a court to place the company in liquidation.
Joint business rescue practitioner Anoosh Rooplal said the reason efforts were being made to restructure the business was based on the fact that Sapo had a social mandate that required it to serve all South Africans.
Rooplal said that while city dwellers had the means to pay for and access communication networks, South Africans living in rural areas had fewer choices. Rooplal said they would not exclude the urban hubs, but intended to fulfil their social mandate by providing wi-fi, printing, scanning, training and the development of internet usage in townships and rural areas.
“The Post Office is able to do this through leveraging its fibre and branch network to provide affordable internet access. Looking ahead, the Post Office is pursuing relevance and financial sustainability through the delivery of meaningful economic and digital communication access to all South Africans. A number of proof of concepts are being rolled out to support this strategy,” Rooplal said.
Rooplal added, “We are cognisant of a number of hurdles that Sapo faces, not least the loss of confidence in its ability to make deliveries, but we are seeing an improvement with our focus on delivery. We believe that Sapo can again play a unique role in South Africa and must be supported. It can be an efficient postal service provider and a lifeline for many South Africans, offering them affordable access to vital communication and financial services.”
The report stated that Sapo’s position would deteriorate if it did not have any cash reserves available to implement the business rescue plan.
The DA’s Communications and Digital Technologies spokesperson, MP Tsholofelo Bodlani, called on the Minister of Communications and Digital Technologies, Solly Malatsi, to take immediate and decisive action to prevent Sapo from reaching Day Zero and entering liquidation. Bodlani said the only viable path for Sapo’s survival was in the private sector, which possessed the necessary expertise, funding, and infrastructure to manage and rehabilitate the institution.
“The time has come to face this reality with urgency and decisiveness. The situation requires more than just rhetoric; it requires a concrete and actionable plan that prioritises the sustainability of Sapo and the protection of its critical services, especially the distribution of social grants to our most vulnerable citizens.”
Bodlani said the crisis came even though, since 2014, Sapo had received more than R10 billion in taxpayers’ funds.
“Yet, despite these significant financial injections, Sapo has shed approximately 10 000 jobs and closed more than 400 branches. Last year, Sapo was provisionally liquidated due to its failure to settle nearly R13 billion in liabilities, a situation so dire that many branches could not even pay rent, leading to legal actions by landlords,” Bodlani said.
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