{"id":789361,"date":"2024-09-03T11:32:08","date_gmt":"2024-09-03T09:32:08","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=789361"},"modified":"2024-09-03T15:18:55","modified_gmt":"2024-09-03T13:18:55","slug":"liquidation-day-zero-for-south-african-post-office-around-the-corner","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/789361\/liquidation-day-zero-for-south-african-post-office-around-the-corner\/","title":{"rendered":"Liquidation ‘Day Zero’ for South African Post Office around the corner"},"content":{"rendered":"\n

The South African Post Office (SAPO) says that its ‘Day Zero’ is approaching fast in October 2024<\/strong>\u2014the day when its cash reserves will run out and its business rescue practitioners (BRPs) may have to liquidate it.<\/p>\n\n\n\n

In an update on the embattled postal group’s business rescue proceedings, it noted that it needed a R3.8 billion bailout from the government to meet its business rescue plan’s needs and to keep operating.<\/p>\n\n\n\n

Between June 2023 and June 2024, the SAPO used a R2.4 billion injection to settle its debts and financial obligations to creditors, as well as to pay other settlements and retrenchment costs. <\/p>\n\n\n\n

The money was also used to pay salaries and benefits to workers who remained, as well as to cover for its operational shortfall.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

The group said that since entering business rescue, it has managed to turn from a net asset value (NAV) of -R7.9 billion in June 2023 to a positive NAV of R840 million at June 2024.<\/p>\n\n\n\n

Before entering BR, total creditors amounted to R8.7 billion, which has been reduced to R440 million after deep compromises. Creditor dividends were paid at 12 cents.<\/p>\n\n\n\n

The process has also seen thousands of workers retrenched and hundreds of SAPO branches shut down.<\/p>\n\n\n\n

Prior to business rescue, the SAPO employed 11,083 workers and operated 1,023 branches. At June 2024, headcount had been reduced by 4,875, and 366 branches closed.<\/strong> <\/p>\n\n\n\n

Despite the operational changes, the SAPO says an additional R3.8 billion from the state is needed to complete the rescue process.<\/p>\n\n\n\n

This would be used to pay off additional creditors (at 18 cents) and the balance of Section 189 retrenchment packages for over 4,000 workers who were let go, it said.<\/p>\n\n\n\n

However, the bulk of the financing (R2 billion) would be reinjected into the business to recapitalise it.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

If the group does not get the bailout it needs, it warned that liquidation may well be the final outcome.<\/p>\n\n\n\n

“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<\/strong>,” it said.<\/p>\n\n\n\n

“With no additional funding, the BRPs will be legally obliged to place SAPO in liquidation<\/strong> as directed by the provision of section 141 of the Act.”<\/p>\n\n\n\n

The SAPO said that the consequences of liquidation would be fatal for its Universal Service Obligation mandate. <\/p>\n\n\n\n

The estate would be placed in the hands of the Master of the High Court, who will appoint a liquidator to wind up the estate. <\/p>\n\n\n\n

The liquidator would then become the final authority of SAPO.<\/p>\n\n\n\n

“All jobs will be lost; business operations will cease, save only for those operations necessary to wind up the company. Furthermore, all assets will be sold at forced sale value; any proceeds will be divided amongst creditors. SAPO\u2019s mandate cannot be met,” it said.<\/p>\n\n\n\n

To aggravate matters, the provisional liquidation order (issued prior to SAPO being placed in business rescue) remains in place, it warned.<\/p>\n\n\n\n

“The attorneys for the provisional liquidators have been successful in extending the rule nisi on three separate occasions. We have a difference of opinion and have applied for a special motion court to fully ventilate our position. The matter is set for 18 November 2024.<\/p>\n\n\n\n

“Our position will deteriorate if we do not have any cash reserves available to implement the business rescue plan as adopted,” it said.<\/p>\n\n\n\n

Aside from the funding issue, the business rescue process faces other challenges, it said.<\/p>\n\n\n\n

This includes the non-renewal or withdrawal of the SAPO’s exclusive licence to deliver packages under 1 kilogram, the lack of support from other government entities, risks associated with digital rollout (including insufficient infrastructure upgrades), criminal syndicates and disruptions from retrenched employees.<\/p>\n\n\n\n

\n\n\n\n

Read: Post Office vs couriers in South Africa \u2013 big change coming<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The South African Post Office says time is almost up before cash runs out and liquidation becomes a likely outcome of its business rescue proceedings.<\/p>\n","protected":false},"author":10,"featured_media":113828,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[26,3004],"class_list":["post-789361","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-headline","tag-sapo"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/789361","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=789361"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/789361\/revisions"}],"predecessor-version":[{"id":789453,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/789361\/revisions\/789453"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/113828"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=789361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=789361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=789361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}