South African Post Office Nears Liquidation Point

The South African Post Office (SAPO) is fast approaching a critical financial juncture known as 'Day Zero,' expected in October 2024, when it will exhaust its cash reserves. Despite efforts to stabilise through business rescue efforts, SAPO warns of impending liquidation without a substantial R3.8 billion government bailout.

Over the past year, SAPO has utilised a R2.4 billion government injection to address its debts and operational deficits, improving its net asset value from a negative R7.9 billion to a positive R840 million. However, the postal service still faces significant financial challenges, having reduced its workforce by 4,875 and closed 366 branches in an attempt to cut costs.

The rescue practitioners highlight the necessity of the additional R3.8 billion funding to settle remaining debts and finalize retrenchment packages for over 4,000 workers. Without this support, SAPO could face liquidation, ending its operations and leaving its obligations unmet. The situation is set to be addressed further in a special motion court on 18 November 2024.

Source: Businesstech