The National Treasury has confirmed that the R700m allocation in the Special Appropriation was at the discretion of the department use to deal with any funding pressures they are grappling with in the portfolio, including the financial challenges at SAPO.
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The South African Post Office (SAPO) is on the verge of significant operational change as the National Treasury has authorised the entity to draw from part of the R700 million allocated in the Special Appropriations Bill to the Department of Communications and Digital Technologies (DCDT).
This funding, intended to bolster SAPO's operational costs over the next six months, comes at a crucial time as business rescue practitioners (BRPs) contemplate exiting the entity, following a recent indication of their intention to apply for liquidation of the entity.
Briefing the portfolio committee, Minister of Communications and Digital Technologies Solly Malatsi announced that the National Treasury has confirmed the R700 million allocation is at the department's discretion, allowing it to address funding pressures within the portfolio.
“Access to the use of the R700m can take place once the Special Appropriation Bill is finalised and gazetted by the president.”
Malatsi also said the department and the BRPs were in discussions on the financial projections that would guide the needs of SAPO based on their monthly requirements.
“There is an estimated R350m, which the BRPs will highlight. That is a subject of discussion with Treasury.”
Business Rescue Practitioner Anoosh Roopal said there had been constructive engagements since the last meeting with the portfolio committee.
Roopal confirmed that they had approached the department as early as last September to terminate the business rescue via a court application and made a presentation to the department.
He stated that they had highlighted the looming crisis of cashflow shortfall at SAPO.
“BRPs do not favour liquidation as it is not an ideal outcome,” said Roopal, adding that it was their view that the liquidation must be avoided.
“We will move to terminate business rescue and depending on the approval of funding, hand over the business to the shareholder and the board.”
Roopal stated that the board must be in place, and there must be positive cashflow so that SAPO can discharge its debts and obligations for a period of six months after termination of the business rescue process.
“The process to appoint a board is in the final stages following a series of internal verification and the status of recommended candidates.”
Although the law does not specify the timeline, Roopal said the legal advice they obtained stated that they needed six months.
DCDT Deputy Director-General Tinyiko Ngobeni elaborated on the role of the R350 million, stating it is critical for SAPO’s exit from business rescue.
“This is helping in the immediate term, but we need medium and long-term solutions,” Ngobeni said.
There were mixed reactions from the parties on the R350m during the discussions.
ANC MP Oscar Mathafa expressed relief that the BRPs are no longer considering liquidation, citing optimism about SAPO's potential to serve marginalised communities and support SMMEs.
“That gives us comfort. At some stage, I wondered about their level of commitment that Post Office is rescued and brought to a stage of self-sustenance,” said Mathafa.
DA MP Tsholofelo Bodlani welcomed the news of the BPR's exit, but questioned whether the R350 million would suffice for SAPO's financial troubles, challenging the effectiveness of the business rescue process itself.
MK Party MP Sihle Ngubane questioned the BRPs’ initial push for liquidation without providing other solutions to save SAPO.
EFF MP Sixolise Gcilishe demanded accountability from the National Treasury regarding the R3.8 billion promised during SAPO’s business rescue phase.
“The National Treasury must give the money and it can’t make a commitment only to get away with it,” Gcilishe said.
mayibongwe.maqhina@inl.co.za