No partner, no funding: Post Office wants out of rescue anyway

The South African Post Office is trying to leave business rescue without a single committed private sector partner, without guaranteed government funding and with an unresolved statutory creditor claim that two funds are now using to oppose its exit.

That was the picture that emerged on Tuesday when the Post Office, its business rescue practitioners and its newly appointed board briefed parliament’s portfolio committee on communications & digital technologies on the transition “from business rescue to a sustainable public enterprise”.

Joint business rescue practitioner Anoosh Rooplal told the committee that partnerships had been “an important feature of the plan” and had received serious attention “from day one”, he said, but “there was no partner willing to put money into the business” while the entity remained in rescue. He described it as “a bit of a chicken and egg” situation, arguing that exiting rescue would itself remove the uncertainty that had kept investors away. Post Office acting CEO Fathima Gany made the same argument to TechCentral in July .

TechCentral reported in December that government had opened the Post Office up to private sector partners to help rebuild the business. Committee chair Khusela Diko noted at the outset of Tuesday’s meeting that the invitation to the private sector had gone out “in December or so of last year”, that “we’re nine months down the line” and that there was “still no indication … whether there is progress”.

Communications minister Solly Malatsi acknowledged the process had “moved much slower than we had all anticipated”. No binding deal has been signed.

Gany was candid on Tuesday about where that leaves the institution, telling the committee: “Business rescue preserved and stabilised the Post Office. It did not complete the recovery of the institution. These are two different things,” she told MPs. “If the question is whether the Post Office is sustainable today, the answer is no.”

She argued there was “no single intervention” that would carry the company from recoverability to sustainability, and that partnerships were “a strategic pillar of sustainability … not a substitute for the sustainability strategy”. The strategy, she said, would also require appropriate funding of the public mandate, earned revenue, modernisation and commercialisation of the Post Office’s property and infrastructure.

On what has actually been achieved, the business rescue practitioners pointed to a request-for-information process that drew 95 responses covering 129 opportunities across six clusters. The Development Bank of Southern Africa has come on board as transaction adviser, and a related request for proposals was issued on 17 July and closed on 7 August. Live, revenue-earning initiatives so far include an e-registered mail service, tower, mast and rooftop leasing, and a national lottery distribution arrangement.