R380 million bailout for the Post Office
Minister of Employment and Labour, Nomakhosazana Meth, has formally implemented a R381 million lifeline to save the South African Post Office (SAPO)
The signed agreement between SAPO and the UIF aims to preserve 6,000 jobs and support the revitalisation of the state-owned entity.
The UIF will use the Temporary Employer-Employee Relief Scheme (TERS) to inject over R381 million into SAPO over a six-month period.
This is designed to provide relief to the thousands of employees while SAPO implements a turnaround strategy.
The UIF and SAPO formally entered into a Memorandum of Agreement (MOA), marking the establishment of a strategic partnership between the two entities.
“This is a bold and necessary step to protect workers and restore confidence in our public institutions,” said Meth.
“The TERS programme is not just a financial mechanism—it is a strategic tool to stabilise employment, support economic recovery, and ensure that no worker is left behind.”
The minister said that the funding will be disbursed in monthly tranches via a dedicated TERS bank account, with strict governance, auditing and compliance measures in place.
The labour department added that SAPO will submit regular reports, maintain transparent accounting records, and implement a detailed turnaround strategy as a condition of the funding.
The lifeline follows a thorough adjudication process by the TERS Single Adjudication Committee (TERS SAC).
The process included representatives from the CCMA, the Department of Higher Education, the Department of Small Business Development, and other stakeholders.
Troubled times for the company
The South African Post Office has faced a series of challenges in recent years, recording an operating loss of R2.17 billion in 2024.
Having opened in 1792, the SAPO is the oldest institution in South Africa. However, the company has bounced between liquidation and business rescue over the last few years.
Presenting its annual results for the 2023/24 financial year to the Portfolio Committee on Communication, SAPO’s business rescure practioners highlighted the progress made at the SOE.
After being placed under provisional liquidation in February 2023, the company appointed business rescue practitioners, setting the process aside.
The business rescue practitioners then assumed the responsibility of the Post Office’s Board of Directors and the Accounting Authority.
The business rescue plan was adopted by the group’s creditors in December 2023. The turnaround strategy involves closing several branches and cutting the workforce.
The group retrenched over 4,300 employees as part of its ongoing business rescue process in April and May 2024.
Its branch network was trimmed, with 366 Post Office branches permanently closed, leaving just over 650 branches.
On top of the recent R380 million lifeline, the Post Office also received a R2.4 billion bailout from the fiscus in 2023/24 financial year.
This funding supported SAPO’s current operations, some of the retrenchment costs and payment of creditors.
Nevertheless, the BRPs in their presentation to the Portfolio Committee warned that R3.8 billion in funding is still needed to implement its Business Rescue plan.
While the group has not yet published financial results for 2024, its corporate plan through to 2030 shows that it anticpates continued reduction of losses over the next five years, with a turn to profit expected in 2028.
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