Latest news with #SouthAfricanPostOffice
IOL News
3 days ago
- Business
- IOL News
Funding crisis looms for SA Post Office and Post Bank as rescue practitioners prepare to exit
The National Treasury firmly ruled itself out as an option to recapitalise SAPO. Image: Supplied Uncertainty surrounds the funding of about R7 billion needed to recapitalise both the South African Post Office (SAPO) and the Post Bank after National Treasury firmly ruled itself out as an option. This comes as the SAPO Business Rescue Practitioners prepare to exit the process, leaving the entity with a R1.7bn paper profit. During a briefing to Parliament's Portfolio Committee on Digital Technologies and Communications on Tuesday, SAPO's group acting CEO, Fathima Gany, expressed the urgency of the situation. Gany said SAPO required R3.8bn to efficiently run its extensive network of 657 branches while integrating necessary digitisation capabilities. "The magic number is R3.8bn. It could be anything else, unfortunately the fiscus doesn't have the ability to give us that and we have to appreciate that. How do we get SAPO fit for business to operate in this futuristic space that's digitalised?" Gany said. "We don't know what the funding model will be as we go out to the market. It has to be a hybrid because if it's not a hybrid and we turn only to the fiscus and the answer is no, then its a futile discussion on how to get SAPO ready for business." Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Gany said the Post Office had settled all historical and outstanding debt through the business rescue process in a compromise that saw 12 cents to the rand paid out to the creditors, with the remainder flushed into the profit and loss account. She said SAPO looked like it made profits but those were none cash profits, and they were on the back of expenses while there were some creditors in dispute and immaterial amount. Gany said SAPO was close to finalising a service-level agreement with the Post Bank in the services it delivers to it, and some of the commercial revenue streams envisaged from postal branches. Meanwhile, Post Bank acting CEO Nikki Mbengashe said it was unclear how the bank could structure the at least R3bn required for it to serve the identified niche. Mbengashe said one of the options was to obtain guarantees from the National Treasury to enable the bank to raise funding without necessarily diluting the shareholding. "How much funding do we need? A lot if we really want to build branches, if we want to build digital presence. We don't have ATMs, branches and the infrastructure we need to have to provide digital capabilities," Mbengashe said. "The minimum is R3bn. We have done that exercise, we are engaging with the board in our next meeting. We have no intention of privatising the Post Bank, but we do need funding therefore we need to find options. We have gone to the National Treasury three times and three times the National Treasury has said no." Cape Argus
The Citizen
3 days ago
- Business
- The Citizen
Increased risks of cyberattacks, limited skills among Sapo's challenges
The Sapo aims to move from a loss of R1.03 billion in 2025 to a net profit of R1.48 billion in 2029. The South African Post Office (Sapo) has a plan in place to turn its business around by 2029. However, several hurdles remain that it must overcome to reach its goals. In 2023, the state-owned enterprise entered business rescue with R8.7 billion in outstanding debt to creditors. It requested a R3 billion bailout at the end of 2024 to avoid liquidation, but National Treasury decided against the move. ALSO READ: Post Office rescue plan is working, but more money is needed For the financial year 2024-25, Business Rescue Practitioners (BRP) managed to pay creditors R1 billion. On Tuesday, Sapo presented its corporate plan to the Portfolio Committee on Communications and Digital Technologies, outlining its strategy for turning things around over the next five years. Sapo's corporate plan Acting CEO Fatima Gani stated that the entity is exploring the formation of partnerships with e-commerce platforms and small to medium-sized enterprises (SMEs) to unlock new revenue streams. Public-private partnerships would also help modernise Sapo infrastructure without requiring full privatisation, she said. The Sapo hopes to reach the R5 billion mark in revenue; however, this can only be achieved with the help of investments. ALSO READ: Union fights liquidation of Sapo while govt says it cannot bail it out 'If we had to achieve this revenue stream, there needs to be an investment, whether it's through a partnership, capital injection, equity injection, or raising funds on our own. We need those investments to make Sapo fit for business, to achieve a diversified revenue stream,' said Gani. 'We are forecasting to be breaking even around 2027–2028, which means working capital stress that we feel, and we keep on coming back to the government to say please help us fund this organisation, will fall away as we are on our investments from our diversified revenue stream.' Market threats Among other threats, Sapo will have to outplay increasing competition from more agile and technologically advanced private sector operators amid a decline in demand for traditional postal services. It will have to find growth amid weak economic conditions and increasing business costs, which will negatively impact Sapo's operational costs. There is also a threat of an increase in cyberattacks, which have recently targeted the public sector. Security costs are expected to increase by 6% per annum due to network expansion over the next five years. ALSO READ: Ramaphosa signs Post Office Bill into law 'This one keeps me awake at night, as it is relevant, and we have seen it happening in the public and private sectors. Unfortunately, if the very clever people put their minds into something positive, we would be ahead of this, but these very clever people join the dark side of the world,' said Gani. 'They are always a step ahead. How do you stay on top of cyberattacks? As a national asset, we hold critical information regarding citizens, including their personal information, residences, and addresses. This is something that keeps me awake at night.' Escalating operational costs, including employee wages, transport, and security services, exacerbate Sapo's financial distress. Employee salaries Last month, Sapo and the Unemployment Insurance Fund (UIF) reached an agreement to fund employee salaries for the last half of the year. The Ters scheme will inject R381 million to assist 5 956 employees. Gani lamented that the Sapo's slow pace to embrace digital transformation has limited its ability to compete effectively with the private sector. This is in addition to the limited skills to transform and modernise the entity 'We have multiple vacancies from a leadership perspective. We have limited skills internally.' The Sapo aims to move from a loss of R1.03 billion in 2025 to a net profit of R1.48 billion in 2029. READ NEXT: More millions to save jobs at SA Post Office
IOL News
11-06-2025
- Business
- IOL News
Scopa express disappointment over SAPO's stagnant audit outcomes
The audit into the South African Post Office found that there was no consequence management for irregular, wasteful, and fruitless expenditure, and investigations were delayed. . Image: Independent Newspapers Archives Parliamentarians on Wednesday expressed their unhappiness with the state the South African Post Office (SAPO) was in, with one even suggesting that the state-owned enterprise should just close shop. This is after the Office of the Auditor-General (A-G) briefed the Standing Committee on Public Accounts about SAPO's audit outcome for 2024/25. The entity, which is under business rescue since, obtained for a third year in a row a disclaimer, which is the worst audit opinion. ANC MP Helen Neale-May said SAPO was a relevant institution to communities and South Africans, but it was allowed to disintegrate over the years. 'It is very disheartening to see such an institution crumble before one's eyes,' Neale-May said. ActionSA's Alan Beesley said the institution was not going to survive. 'It is quite clear it is on life support and essentially the plug should be pulled. Looking at this report and outcomes, it is quite clear, it is not going to survive,' Beesely said. Scopa heard that SAPO's audit outcomes remained stagnant for three years, and no opinion could be expressed due to the mess of its finances. Audit engagement manager Motshekga Makhai said the audit outcome was attributable to the institution's going concern status and failure to support strategies to turn around the business, and failure to provide supporting documents. 'They did not have supporting documents to support line items,' Makhai said. The audit found that the financial statements continued to be concerning, and the control environment was quite weak. Makhai said serious intervention was required for SAPO to produce credible financial statements. 'The business rescue practitioners brought in consultants. This only resulted in a reduction of qualification areas, but the control environment remained the same. Because of the weak environment, some of the qualifications are repeated. It indicates that when there are action plans, they are not implemented or tracked accordingly.' Makhai added that compliance with key legislations remained unchanged, and governance and oversight were areas of concern. 'This was a regression in the current year. It was attributable to the fact that there was no board in place as it was dissolved,' she said, adding that there was no company secretary and board committees were non-existent. The audit found that there was no consequence management for irregular, wasteful, or fruitless expenditure, and investigations were delayed. 'For SAPO to deal with irregular expenditure, they need to ensure that staff understand how to deal with irregular expenditure well and understand the prescripts of law to deal with expenditure. The accounting authority to be appointed must deal with the remaining balance by ensuring there is proper consequence management,' Makhai added. The audit also found that fruitless expenditure was significantly reduced due to the business rescue process. SAPO wrote off R136 million of the fruitless and wasteful expenditure, but it has yet to pay R16m to its creditors. Makhai told Scopa that SAPO achieved 13% of its targets and was way below in terms of its targets for building capacity and capability. 'This means if you do not achieve the core mandate, you are unable to render the much-needed service to the citizens. This results in the loss of trust in the Post Office.' Makhai stated that SAPO blamed its going concern status on its financial constraints. The entity was unable to collect revenue because the business was not doing well, and so serious is the situation that the revenue generated could not even cover the daily expenditure. SAPO's business rescue plan, which was adopted in December 2023, was based on the R6.2 billion commitment from the government. The entity received R2.4bn, while the R3.8bn is still outstanding. The committee heard that R86m was paid to the business rescue practitioners and consultants during the financial year under review. Makhai said SAPO's business modernisation and new business initiative strategies were yet to be implemented to assist in the turnaround and find ways to increase revenue, which is on continuous decline. ANC MP Ntando Maduna was concerned that SAPO was not achieving its strategic performance targets while receiving bailouts. 'It is important that they show the will to change. If consultants have not worked, it is unfair to us to use taxpayers' money to bail out SAPO and pay consultants not assisting to improve internal controls,' said Maduna. Scopa chairperson Songezo Zibi was concerned with whether the rescuing of SAPO was with the right strategy in mind. Zibi said there was a need for a policy rethink about the future of SAPO, which has a similar mandate with other banking institutions in government and also contended with explosion of courier companies. [email protected]
Eyewitness News
29-05-2025
- Business
- Eyewitness News
Business rescue practitioners tells Parliament task to save struggling Post Office a success
CAPE TOWN - The South African Post Office (SAPO)'s business rescue practitioners have told Parliament their task to save the struggling entity has been a success. They told Parliament on Wednesday that the South African Post Office has seen the first positive balance sheet with a net asset value of R1 billion - the first since 2012. But the turnaround has come at a huge cost, with more than 4,000 employees retrenched and hundreds of branches closed, affecting poor and rural communities. The Post Office was placed under provisional liquidation in February 2023, and a few months later, Anoosh Rooplal and Juanito Damons were appointed as the joint business rescue practitioners. They told the communications and digital technologies committee that they've reached a point where they can start planning their exit. Rooplal said the process has yielded a lot of positive results. "This certainly has been a complex business rescue process; it hasn't been easy, but nonetheless, much progress has been made since our appointment." He said the entity has also resolved its debt problem, which amounted to billions. "Effectively, we're handing back an entity, a Post Office… that's virtually debt free." The rescue team told the committee that the Post Office still needs a cash boost after being denied a R3.8 billion bailout by Treasury in 2024. ALSO READ: Mashatile says govt not ready to let go of cash-strapped Post Office yet
Eyewitness News
28-05-2025
- Business
- Eyewitness News
Business rescue practitioners tell MPs they've turned SAPO around
CAPE TOWN - The South African Post Office's business rescue practitioners say they've managed to turn around the ailing entity. The team of rescue practitioners is now preparing to exit the business rescue process and hand control of the entity back to management after almost three years. The rescue team briefed Parliament's communications and digital technologies committee on the finalisation of the rescue process, which saw over 4,000 retrenchments and the closure of hundreds of branches. The business rescue practitioners have previously come under fire from the committee, which said that progress was not evident over the last two years. The practitioners were also criticised in April for failing to provide the committee with an update in over four months. But on Wednesday, Fathima Gany, SAPO acting group CEO, presented a positive outlook, saying that they were in the best shape since 2012. "This resulted in the strengthening of the balance sheet and a positive net asset value of R1 billion at the end of March. This was the first time since 2012 that SAPO had a positive net asset value, so you see the benefits that you gain from a business rescue process." In terms of the status of the business rescue exit process, the team said they were in discussions with the department and were preparing a court application to terminate the business rescue proceedings.
