In what it described as “Day Zero”, the ailing South African Post Office (Sapo) could run out of funds next month.
The situation was so serious that should the funding not be found, it could be at risk of being liquidated.
This emerged when Sapo briefed the portfolio committee on communications and digital technologies on the progress made in the implementation of the business rescue plan.
The presentation was, however, done in the absence of the business rescue practitioners Anoosh Rooplal and Juanito Damons, which angered the MPs.
Rooplal and Damons were appointed after Sapo was placed under business rescue in July last year.
Speaking at the meeting, Deputy Minister Mondli Gungubele said there were “green shoots” since the business rescue plan was implemented.
He said when Sapo was placed under business rescue, the net asset value was R7.9 billion negative, but it was now R840 million positive.
The total creditors was totalling R8.7bn, but it was dramatically far lower at R440m, Gungubele said.
Director-general Nonkqubela Jordan-Dyani said they had received R2.4bn from the National Treasury for the business rescue and that R3.8bn was outstanding.
Acting CEO Fathima Gany said Sapo’s solvency had improved. Gany said 98.6% of the total creditor dividends (R842m) of 12 cents had been paid by July 31.
The statutory and payroll creditors, such as the SA Revenue Service and medical aid schemes, would be paid a further 18 cents dividend upon receipt of the R3.8bn funding from the National Treasury.
Sapo, which had 11 083 employees before the business rescue, has retrenched 4 875 workers for operational reasons.
She said the retrenched employees were to be paid their packages over three tranches.
The first tranche was paid in June 2024, and the second was in August 2024, and the final one will be paid in November.
The MPs heard that the branches of Sapo have been reduced from 1 023 from the period before business rescue to 757 as at the end of July.
Gany said the risks to the business rescue were inadequate funding, lack of support from other government entities for government-to-government business, legislative risks regarding the roll-out of digital inclusivity project and inadequate infrastructure upgrades.
She said the banks were not interested in financing Sapo unless there was a government guarantee.
Gany said based on the latest financial projections, at the current run rate and with no further capital injection by the fiscus, Sapo will only have cash reserves up to October 2024 .
With no additional funding the business rescue practitioners will be legally obliged to place Sapo in liquidation as directed by the provision of Companies Act, she said.
A joint statement with Damons, Rooplal said: “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.”
“We believe that the Post Office 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.”
Cape Times