Communications and digital technologies minister Khumbudzo Ntshavheni has rubbished an offer by former SA Post Office (Sapo) CEO Mark Barnes to buy a controlling stake in the struggling parastatal facing collapse.
“Mr Mark Barnes was given R3.5bn [to turn Sapo around]. As I have indicated, Sapo is now only looking for R1.6bn [government bailout]. He [Barnes] did not turn around Sapo, and it’s very rich for him to say he wants to buy Sapo,” Ntshavheni said in a parliamentary question-and-answer session on Wednesday.
“If he was serious about turning around Sapo, we will not be sitting where we are. The problems of Sapo are coming even from the period when he was CEO. We are not interested in the offer. We have a plan with the current management and board of Sapo to reposition Sapo and turn it around and we are confident that we will achieve that,” said Ntshavheni.
The national postal service that is meant to be a key medium of communication, especially in rural and remote areas, is on a long list of state-owned entities relying on government bailouts to go on operating. It has in recent years been hamstrung by management and financial problems that brought it close to collapse. It has not been profitable for the 16 years, except in 2006, when it posted a profit of R276m.
Barnes resigned in 2019 after a disagreement with the government and the board on their decision to separate Sapo and Postbank, which has applied for a full banking licence.
Establishing the bank was seen as an aspect of a multipronged strategy to modernise Sapo and put it on a profitable, sustainable path in the face of the growth in digital communication.
In a recent column in Business Day, Barnes detailed his plan to save Sapo from collapse, saying he made the proposal in letter to the government in September 2021, but got noresponse.
“I believe I still have the support of all principal stakeholders in the post office, including the employees and unions (despite detractors, as there may still be within the department). I believe that with an appropriate structure and the right leadership the post office can provide the prospect of economic dignity to its people directly, and be a bridge between government and the population at large, to address poverty, unemployment and inequality in our country, like no other organisation is positioned to do,” Barnes said in his letter.
He said he was prepared to lead a consortium that will offer to buy at least 60%, but no more than 75%, of Sapo; 10% of the total issued shares in the post office will be allocated directly to employees (current and future); and the price will be the net asset value of the post office, less the present value of forecast losses as determined by the auditor-general.
“The consortium, over and above the purchase consideration, will inject a further capital sum into the post office, equal to the determined present value of agreed future losses to be funded, in the form of low-yielding (CPI, say) redeemable, convertible debentures, which will either be repaid or converted into further equity in the post office, coincident with the planned listing and further permanent capital raising in the post office, in three years’ time,” Barnes said at the time.
On Wednesday, he said: “If government doesn’t like an offer, they can politely say ‘no’, not attack a person.”
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