Debt-Free But Downsized: Post Office’s Bumpy Road to Recovery

The South African Post Office (SAPO) has finally recovered financially after years of decline, but not without serious repercussions. On Wednesday, business rescue professionals in charge of SAPO’s recovery informed Parliament that, for the first time in more than ten years, the organization now has a positive balance sheet with a net asset value of R1 billion.

Although this indicates financial stability, there were significant human costs involved. During the turnaround, hundreds of post office branches—many of which served rural and impoverished communities—were closed, and more than 4,000 employees were laid off.

Early in 2023, SAPO was placed under provisional liquidation. Later that year, the task of reviving the failing state-owned enterprise was taken on by business rescue professionals Juanito Damons and Anoosh Rooplal.

Rooplal told the parliamentary committee on communications and digital technologies that although the mission was difficult, it produced measurable outcomes. “There has been a lot of progress since our appointment, but it hasn’t been easy. This has been a complex business rescue process,”

Resolving SAPO’s long-standing debt load, which had previously totaled billions, was one of the major accomplishments. The post office is now “virtually debt-free,” according to Rooplal.

But even with the advancements, SAPO is still not completely out of the woods. After the National Treasury rejected their request for an R3.8 billion bailout earlier this year, the rescue team emphasized the necessity of more funding to guarantee a full recovery.

The rescue team stated that now that the foundation is stable, they are getting ready to back off and let SAPO resume its independent operations. It remains to be seen if this new chapter can bring vital postal services back to underprivileged communities.

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Sourced:EWN

Picture: X/@Gentlements