Cape Town - Forecast for October 2024, Day Zero for the SA Post Office (Sapo) is rearing its ugly head, should the struggling government entity be unable to obtain further capital injection.
The portfolio committee on Communications and Digital Technologies was briefed by the Department of Communications and Digital Technologies and Sapo, yesterday.
Notably absent from the briefing were the business rescue practitioners, who were anticipated to have briefed the committee on the progress in implementing the business rescue plan, which was instead done by Sapo executives.
The practitioners were appointed after the High Court granted an application by the government to place Sapo under business rescue in July last year.
Deputy Minister of Communications and Digital Technologies, Mondli Gungubele, said there had been an option to either have Sapo liquidated or placed under business rescue, with the Cabinet opting for business rescue.
The department’s Nonkqubela Jordan-Dyani said the government had no choice but to place Sapo under business rescue.
“It was already placed under provisional liquidation, the options were that we had to settle with all the creditors,” Jordan-Dyani said.
Sapo was given an initial boost of R2.4 billion, facilitated through the National Treasury, with an outstanding R3.8bn as part of that commitment, and with engagements with the National Treasury ongoing.
The committee heard that based on the latest financial projects, the current run rate and with no further capital injection by the fiscus, Sapo will only have cash reserves up to October, referred to as “Day Zero”.
During the business rescue process, should the practitioners conclude that there were no longer reasonable prospects for rescuing the company, they would have to inform the court, company, and all affected persons and apply for an order discontinuing the business rescue process and placing the company in liquidation.
Sapo said the consequences of liquidation would be fatal.
The provisional liquidation order issued prior to Sapo being placed under business rescue was still in place.
As at June 30, 2023, and prior to the business rescue process, Sapo saw its Net Asset Value at negative R7.9bn, with total creditors at July 2023 amounting to R8.7bn.
This has, however, been reduced to a positive of R840 million as at June 30, 2024.
The total creditors by June 30, 2024, was R440m.
Before entering business rescue, Sapo’s total staff complement was 11083 employees.
On January 2, 2024, the business rescue practitioners started with a retrenchment process, facilitated by the CCMA.
This process saw 4875 employees dismissed for operational purposes, with retrenchment packages paid over three tranches.
The number of retrenched employees would reduce as employees were eligible for rehire, Sapo said.
More than 250 disciplinary matters were concluded with dismissals where recommended.
As at July 2023, the total Sapo branches were placed at 1023, with profitable branches at 113.
As at July 2023, there were 129 branches which were non-functional for a number of reasons prior to the business rescue practitioners’ appointment.
As of July 2024, current branches were 657, which were compliant with its Universal Service Obligation commitments.
The Department of Communications and Digital Technologies was also briefed on the KPMG Forensic Report on Postbank’s R89.5m fraudulent transactions.
It was told that the amount had increased by R1.9m, while investigating the fraudulent transactions.
In March 2022, Postbank confirmed it suffered a financial loss of approximately R90m, due to a Postbank cybercrime attack carried out in the last quarter of 2021.