Green light for plan to save Post Office

Henry

The business rescue plan for the Post Office has been approved by its creditors.

Anoosh Rooplal and Juanito Damons, business rescue practitioners, welcomed the development and said the Post Office has an important social mandate intended to provide basic communication services to all households.

“A Restructured Post Office can do this affordably and conveniently, given certain regulatory prices and geographical reach of the branch network,” noted Rooplal. “A Restructured Post Office can also contribute to the financial sustainability of many large and smaller businesses, due to its many procurement activities.”

The Post Office received approximately R2.4 billion from the Department of Communications and Digital Technology and a further R3.8 billion allocation by the government is required as investment capital to repair and modernize the Post Office to support this turnaround strategy.

The business rescue plan will be implemented in two phases over a period of two to five years. Phase one will involve stabilizing the business, reducing the branch network to around 600 branches and right-sizing the staff to around 5,000 employees. The focus will be on improving service delivery levels, which will include expanding its fleet to deliver letters and parcels on time. New digital products will be considered and introduced to increase revenue streams, while more of the day-to-day tasks will be automated.

Phase two will focus on providing diversified and expanded services through hybrid post extensions, new car license disc solutions, increased property rental income or sales of owned property, and creating a digital hub for inclusive communications. Strategic private public partnerships will be sought and negotiated in the e-commerce and logistics space.

“We thank those creditors who voted in favor of the plan. We believe that with our continued involvement, hard work and detailed strategy, we can restructure the Post Office into a future-proof business that can provide ‘communication inclusion’ for all South Africans,” said Rooplal.