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.
Sapo CEO Mark Barnes was 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. Barnes said this goal would be achievable through a good turnaround strategy.
READ THIS: Why the Post Office was right to fire strikers
"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 in the year-earlier period.
"I think we are 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 another strategy that we want to work in, particularly in SA 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 said.
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 would be 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 2016-17.
The funding would 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 posted a loss of R1.5bn.
TMG Digital
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.