By the end of September, the South African Post Office (Sapo) had been in business rescue for about 13 months at a cost to the state of R176m.
This emerged from a written reply by communications and digital technologies minister Solly Malatsi to a parliamentary question by EFF MP Leigh-Ann Mathys.
Sapo was placed in business rescue in July 2023 with Anoosh Rooplal and Juanito Damons appointed as business rescue practitioners (BRPs). At the time it had a debt of R8.7bn.
“In terms of the Companies Act [regulations], a senior BRP appointed for a large company is entitled to charge R1,739.13 an hour plus VAT. The BRPs’ fees are regulated in the Companies Act and by the end of September 2024 amounts to about R175.7m,” Malatsi said.
“The BRPs are accompanied by a team of legal professionals, consultants and specialist advisers who charge an hourly tariff based on their professional tariffs and level of seniority (referred to collectively as the BPR team).”
The BRPs have assured the department they are mindful of the financial constraints of Sapo and have ensured the business rescue fees are within a strict budget and they will continue to benchmark their fees against other business rescues conducted in the country
— Solly Malatsi, communications and digital technologies minister
The BRPs themselves had cost R6.73m while the team of consultants had cost R144m (both excluding VAT) and there had been disbursements of R2m.
“The BRPs have assured the department they are mindful of the financial constraints of Sapo and have ensured the business rescue fees are within a strict budget and they will continue to benchmark their fees against other business rescues conducted in the country. Any variation in their fees is governed by creditors, as this is required to be approved by creditors at a meeting of creditors in terms of the Companies Act,” he added.
DA MP S'bongeseni Vilakazi asked the minister in a separate question about the purported “day zero” the BRPs had threatened would occur at the end of October if the entity did not receive a R3.8bn bailout from the Treasury. This was needed, they said, to pay the remaining debt to creditors and upgrade infrastructure.
Sapo has received R10.4bn in bailouts over the past 10 years including the R2.4bn allocated in the February 2023 budget.
No allocation was made for Sapo in the medium-term budget policy statement and finance minister Enoch Godongwana said during a media briefing the day zero appeared not to have materialised.
“Given that no funding was allocated to Sapo as per the medium-term budget speech, the BRPs have delayed all capital expenditure, for expansion and to maintain the business. In addition, austerity measures have been implemented to preserve cash flow while expenditure is limited to essential services only,” Malatsi said.
“Further initiatives being taken by the BRPs and Sapo management to sustain existing revenue include maintaining communications with key customers and focusing aggressively on debt collection.”
Malatsi said his department was also assisting Sapo, in collaboration with the Treasury and the BRPs, in exploring alternative funding options, including seeking private sector partnerships which would bring innovation, as well as crowding in the necessary funding required to modernise the business.
“While the challenges are significant, we are committed to taking every reasonable step to ensure Sapo’s survival and future success,. This means pursuing every viable avenue to revitalise the institution and restore its place as a trusted partner in the lives of South Africans.
“By embracing reform, fostering partnerships and reimagining Sapo's role in a changing world, we can secure its future.”
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