South African Post Office exiting business rescue
The South African Post Office is set to exit business rescue, with the company no longer technically insolvent after retrenching thousands of employees.
The Joint Business Rescue Practitioners (BRPs) of the SAPO have launched an application in the High Court of Pretoria to end business rescue proceedings.
The BRPs also authorised the filing of a notice of substantial implementation of the adopted business rescue plan, a step towards formally concluding the business rescue process as set out in the Companies Act.
The BRPs said this was a substantial implementation of the business rescue plan that was within their powers to execute.
“The business rescue process has stabilised SAPO’s balance sheet and significantly improved its operational position,” said BRPs Anoosh Rooplal and Juanito Damons.
The BRPs said SAPO has made substantial progress over the last two years. Revenue increased by R2 million to R1.54 billion for the year ended 31 March 2026.
The group’s net loss also decreased significantly to R71 million, compared with R514 million in the previous financial year. This was the lowest net loss recorded over the past several years.
SAPO’s balance sheet also improved, moving to a positive R840 million, from a negative net asset value of R7.9 billion, which rendered the organisation technically solvent.
SAPO also reduced its creditor debt from about R8.7 billion to R440 million.
More than 99% of the approved 12 cents to the rand distribution, about R1 billion, was paid to creditors by August 2024.
Since the commencement of business rescue, SAPO has achieved several significant milestones:
The group’s section 189A process resulted in the reduction of 4,342 employees, completed in April 2024, with all retrenchment obligations fully settled by November 2024.
Monthly staff costs thus reduced from R211.9 million to R115 million, resulting in annual savings of approximately R1.2 billion.
A total of 366 branches were permanently closed. 657 branches remain open, including strategically retained sites to serve rural communities.
What’s next for SAPO
“The next phase, to grow and modernise the entity, requires shareholder-led intervention, injection of capital, and permanent governance structures,” said the BRPs.
“We have therefore asked the court to declare the business rescue substantially implemented so SAPO can transition back to normal governance under its shareholder, leadership team and new board.”
The new board’s tenure starts on 22 June 2026, while Acting CEO Fathima Gany has also established a High Care Leadership Team (HCLT) to oversee and execute SAPO’s transition programme.
The HCLT will serve as the principal executive forum responsible for ensuring business continuity while supporting governance stabilisation and long-term sustainability.
The HCLT does not replace the board’s authority and will report directly to the board throughout the transition period.
“The High Care Transition Programme has therefore been designed to preserve this progress, safeguard value created during Business Rescue and support the organisation’s continued recovery,” said Gany.
“There will be deliberate focus on extending the cash cycle, while executing on strategic initiatives including the partnership programme, revenue diversification, property monetisation, etc.”
Certain elements of the turnaround strategy remain incomplete due to funding constraints.
Although SAPO received an initial R2.4 billion government allocation to support credit payouts and retrenchment costs, a second R3.8 billion funding tranche required for growth lapsed.
Several modernisation initiatives, including IT upgrades, digital services and broadband capabilities, will now fall within the responsibility of the shareholder and the new board.
“Coming out of the Business Rescue is a positive step for this entity. SAPO can and should play a critical role for all South Africans, especially those people living in the rural areas,” said Rooplal.
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