The South African Post Office (SAPO) has put on hold capital expenditure at the financially-strapped state-owned enterprise after it failed to secure a bailout from National Treasury.
The South African Post Office (SAPO) has put on hold capital expenditure at the financially-strapped state-owned enterprise after it failed to secure a bailout from National Treasury.
This comes after Sapo informed Parliament three months ago that it was facing what it called “Day Zero”, a situation where it could run out of funds in October.
It had stated that the situation was so serious that should the funding be not found, it could be at risk of being liquidated.
Sapo, which was placed under business rescue last year, had informed Parliament that it received R2.4bn from the National Treasury for the business rescue and had expected an outstanding R3.8bn.
However, Finance Minister Enoch Godongwana dashed their hopes when he tabled the medium-term budget policy statement and did not make an allocation when exercising his “tough love” on SOEs.
In a parliamentary question, DA MP S’bongiseni Vilakazi asked Communications and Digital Technologies Minister Solly Malatsi what the current situation at Sapo was regarding its “Day Zero” since it did not receive the R3.8 billion bailout.
In his response, Malatsi said the entity has put the brakes on capital expenditure and was also implementing cost-containment measures.
“Given that no funding was allocated to the Sapo, as per the medium-term budget speech, the business rescue practitioners have delayed all capital expenditure, both for expansion and to maintain the business.
“In addition, austerity measures have been implemented to preserve cash flow while expenditure is limited to essential services only,” he said.
Malatsi also said further initiatives being taken by the business rescue practitioners and Sapo management to sustain existing revenue included maintaining communications with all key customers and focusing aggressively on debt collection.
The department is assisting Sapo, in collaboration with the National Treasury and the business rescue practitioners, in exploring alternative funding options.
“This entails actively seeking private sector partnerships as a key strategy in engendering innovation while also crowding in the necessary funding required to truly modernise the business,” he said.
Malatsi also said they were committed to taking every reasonable step to ensure Sapo’s survival and future success.
“This means pursuing every viable avenue to revitalise the institution and restore its place as a trusted partner in the lives of South Africans.
“By embracing reform, fostering partnerships, and reimagining Sapo’s role in a changing world, we can secure its future, not just as an institution, but as a vital connector of people, opportunities and services across the country,” he said.
Malatsi recently told the National Assembly that his department, together with the Treasury, has established a task team to look at seeking partnerships that can help competitiveness of the post office and help make it sustainable.
He said the task team’s focus would be to make sure they positioned Sapo in such a way that it was able to meet the market demand.
Meanwhile, Malatsi has revealed that business rescue practitioners Anoosh Rooplal and Juanito Damons have been paid R175.7 million from August 23 until September 2024.
Responding to questions from EFF MP Leigh-Ann Mathys, Malatsi said Rooplal and Damons were appointed by the high court after a recommendation from the department.
“Their appointment was ratified by the registrar of the Financial Sector Conduct Authority and the majority of Sapo creditors, in line with the high court order and the Companies Act requirements.”
“The business rescue practitioner’s fees are regulated in terms of the Companies Act, and as of the end of September 2024, amounts to approximately R175.7 million.”
He explained that the business rescue practitioners were accompanied by a team of legal professionals, consultants, and specialist advisors who charge an hourly tariff based on their professional tariffs and level of seniority.
In terms of the R175.7m fees paid out, a total of R6.7 went to the business rescue practitioners, R143.9m to consultants and R2m on disbursements.
Cape Times