R12.5bn debt headache for SA Post Office business rescue practitioners

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Improved revenues, lower costs and structural changes in its business model will be key to achieving a turnaround, practitioners say.

The South African Post Office’s joint business rescue practitioners are concerned with the entity’s liabilities which reportedly totalled R12.5 billion at the end of July, saying it raises questions about the viability of the business rescue process.

“We have been working with management to address the decline in revenue, generate additional sources of revenue, reduce costs, effect key structural changes in the Sapo business model and consider key investment in technology and infrastructure to drive performance,” Rooplal said. Salary payments for staff have remained steady so far, however they have cautioned that Sapo’s ability to continue paying salaries will depend on the entity’s cash flows and receipt of additional funding from the Department of Communications and Digital Technologies and National Treasury.

The BRPs added that a review of the Post Office’s structure and branch network continues to be a key focus moving forward, with key assessment criteria including profitability, geographical reach to customers, and mandated universal services among others, for each branch.

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