SA Post Office plans to get financial books in order

31 August 2016 - 16:42 By Neo Goba
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The South African Post Office (Sapo) says it will get its financial books in order by 2018 after paying off its debts to its creditors.

Speaking to TMG Digital at a post office branch in Pimville‚ Soweto‚ at an event that is part of a spring-cleaning of branches by Sapo workers across the country to celebrate recent milestones‚ Sapo CEO Mark Barnes said this would be achievable through a good turnaround strategy.

"We have raised all the capital that we need and we have settled all the labour liabilities of the past and we have structured a deal going forward. We will also pay all our creditors which will all happen in a short while… but we have paid all the backlogs to creditors even though we have made losses‚" said Barnes.

His comments follow his recent statement to Parliament’s portfolio committee on telecommunications and postal services that the entity recorded a net loss of R259m in the first quarter‚ an improvement of R26m on the same period in the previous year.

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"I think we a moving into a new world‚ a modern post office doesn't just deliver letters… a modern post office gets involved in e-commerce as there is a lot of traffic happening in the ether but ultimately‚ whatever you order has got to be delivered to your house and so we own the last mile and that is one of our strategies‚" said the CEO.

"Financial services is the another strategy that we want to work in particularly in South Africa where you have an unequal distribution of wealth. We have to create a middle class and that means you have to finance small business and do it at a proper cost and we think we are the consolidation of people's financial services‚" he added.

Sapo has also secured a three year loan facility of R3.7bn from major financial institutions‚ consolidating its existing facilities of R1bn. The CEO said these funds had been used in part to settle historical labour matters. In July‚ the Post Office signed an agreement with the recognised trade unions to settle wages and conditions of employment to the period ending 2016/2017.

The funding will also be used to pay outstanding creditors and fund critical projects to support the corporate turnaround plan.

The Post Office has been left reeling after a prolonged strike in 2014 as well as financial mismanagement‚ the dissolution of its board and alleged fraud and corruption.

Last year‚ Sapo racked up a loss of R1.5 billion.

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