Business rescue team tells Parliament the South African Post Office is seeing its first financial recovery in over a decade. The South African Post Office business rescue team has told Parliament that the long-troubled state-owned entity is finally showing signs of financial recovery, marking a major milestone in its turnaround strategy. On Wednesday, business rescue practitioners reported that the South African Post Office (SAPO) has achieved its first positive balance sheet since 2012, with a net asset value of R1 billion.
This progress, announced during a briefing to Parliament’s Portfolio Committee on Communications and Digital Technologies, has been described as a breakthrough in a complex and challenging rescue process. The South African Post Office was placed under provisional liquidation in February 2023, following years of financial mismanagement, mounting debt, and a sharp decline in revenue due to digitisation and dwindling mail volumes.
In July 2023, business rescue practitioners Anoosh Rooplal and Juanito Damons were appointed to stabilise and restructure the entity. Less than two years later, they now say SAPO is virtually debt-free and in a position where exit planning from business rescue can begin.
“This certainly has been a complex business rescue process; it hasn’t been easy,” Rooplal told Members of Parliament. “But nonetheless, much progress has been made since our appointment.”
Business rescue: Post Office sees first recovery in decade
“Effectively, we’re handing back an entity — a Post Office — that’s virtually debt-free,” said Rooplal, who added that stabilising the institution’s financial health was one of their top priorities when they took over.
However, this turnaround has come at a significant human and social cost. More than 4,000 employees have been retrenched under the business rescue plan, and hundreds of post office branches, especially in poor and rural areas, have been closed. These cuts have sparked criticism from unions and civil society organisations, who argue that access to basic postal and social services has been severely reduced for vulnerable communities.
The closure of branches also means that millions of South Africans in remote areas may now face long distances or lack access entirely to government services historically provided by the Post Office — including the payment of social grants, identity document collection, and utility payments.
Despite these setbacks, the South African Post Office business rescue practitioners remain cautiously optimistic. They say the hard decisions were necessary to restore operational and financial stability, and to give SAPO a fighting chance in a fast-evolving communications environment.
Still, the path forward remains uncertain. Earlier this year, National Treasury denied a request for a R3.8 billion bailout to support the Post Office’s operations and transformation plans. The rescue team has warned that while the institution is now financially leaner and more viable, a cash injection is still urgently needed to support modernisation and improve service delivery.
The rescue practitioners have requested that Parliament assist in lobbying Treasury to reconsider its funding stance, arguing that without further support, SAPO could once again face financial distress — despite the progress already made.
SAPO has also struggled with its aging infrastructure, technological limitations, and competition from private courier services that have outpaced it in efficiency and customer service. The business rescue plan includes a roadmap for digital transformation and repositioning the Post Office as a relevant and competitive player in a tech-driven economy.
Parliamentarians welcomed the progress but pressed the business rescue team on issues of job losses and future sustainability. Some MPs raised concerns about whether SAPO’s recovery was truly long-term without addressing its revenue model and broader relevance in the digital age.
As the South African Post Office business rescue process nears its conclusion, focus is shifting toward what a post-rescue SAPO will look like — and whether it can regain public trust and relevance in an age where traditional mail is fast becoming obsolete.
The committee is expected to follow up with additional oversight sessions in the coming months to assess the final phase of the business rescue process and SAPO’s readiness to resume independent operations.
Source- EWN