By Lehlohonolo Lehana.
The Post Office’s business rescue practitioners (BRPs) says there are “positive indications” they will receive a promised R3.8 billion state bailout now that creditors have backed their rescue plan.
The joint BRPs – Anoosh Rooplal and Juanito Damons – confirmed the development, noting that the two-phased restructuring of the business will enable it to fulfil its social mandate.
This was a crucial step because if the creditors had rejected the plan, the SA Post Office would have faced liquidation and the permanent closure of its doors, said Rooplal.
However, for the plan to be implemented, the SA Post Office will need a R3.8-billion bailout from the government, which, through Cabinet, has agreed (in principle) to provide more money to the SOE.
It will now be up to Finance Minister Enoch Godongwana to confirm additional money or the mechanism of support for the SA Post Office, a decision that might be unveiled in 2024 during February’s Budget.
The plan, which was first published last month, also includes cutting 6000 jobs and closing more than 400 branches.
Rooplal said the Post Office will be repurposed to provide diversified and expanded services through hybrid mail extensions, new motor licence disc solutions, increased property rental revenues and the creation of a digital hub for inclusive communications.
“The Post Office fulfils an important social mandate intended to provide key basic communications services to all households, including the rural areas, where access to wifi, smartphones and printers are not a given. A restructured Post Office can do this affordably and conveniently, given certain regulatory pricing and geographic reach of the branch network.”
The plan will be adopted in two phases over a two to five-year period.
“Phase 1 will involve stabilising the business, reducing the branch network to some 600 branches and rightsizing the headcount to some 5,000 employees. Up-skilling current staff and employing additional digital specialists and leaders will assist in the modernisation and digitisation transition.
“The focus will be on improving service delivery levels, which will include increasing its fleet to deliver letter and parcels timeously.
New digital products will be considered and launched to increase revenue streams while automating more of the daily tasks,” added Rooplal.
The SA Post Office will also shift the function of paying social grant beneficiaries to Postbank – which has also struggled with technical glitches in the past months, leaving thousands of grant recipients throughout the country without their money for days.
The BRPs believe that the Plan will achieve a better return for creditors and a better outcome for all other affected persons than liquidation.
Minister of Communications and Digital Technologies Minister Mondli Gungubele welcomed the plan, saying it sets the government on course in turning the tide in saving the Post Office in the interest of the country’s developmental agenda.
“The SA Post Office remains an important institution in our postal services network nationally and in the SADC region.
ull details on the Business Rescue Plan can be accessed on: https://www.postoffice.co.za/BusinessRescue/index.html.