The Department of Communications and Digital Technologies (DCTC) has filed an application with the North Gauteng High Court in Pretoria to place the SA Post Office (SAPO) into business rescue in a bid to save it from liquidation. 

The department's draft business rescue plan includes steep staff cuts to reduce SAPO's salary bill, which has far outstripped revenue. 

The plan, which Cabinet has approved, is centred around cutting 7 000 of the Post Office's roughly 11 000 staff in order to save around R1.5-billion a year in employee costs. 

SAPO has been making losses of more than R2-billion a year for the past three years. Of its 1 108 branches, only 193 make a profit.  

It owes hundreds of millions of rands to creditors, landlords, its medical aid fund and its pension fund. 

The Post Office received a R2.4-billion bailout from Finance Minister Enoch Godongwana in his 2023 Budget in February, but the funds have not yet been handed over. 

In a briefing to Parliament on Tuesday, Minister of Communications and Digital Technologies Mondli Gungubele said the state would not allow the post office to be liquidated. 

"The worst thing we can allow is for SAPO to go under," he said. "It's a no-no". 

Gungubele said Cabinet had indicated its support for additional funding for the purposes of business rescue, without providing any details.    

In court papers, meanwhile, the minister warned that the liquidation of SAPO would have "dire consequences".

"South Africa's ability to send and receive postage items domestically and internationally will likely come to a grinding halt". 

In addition to postal and courier services, the Post Office provides chronic medical and social grant distribution in rural areas. It also helps with car license renewals in most provinces. 

How to proceed? 

The Post Office was placed into provisional liquidation on 9 February in an application brought by an aggrieved landlord. 

The return date – when the court would hear whether or not it should grant a final liquidation order – was set for June 1. 

Last week, just days before the return date, the DTCT lodged an urgent application for business rescue. 

The full application for business rescue will be heard early next month. 

Meanwhile, the court has agreed to extend the return date for the liquidation application to late October. 

Acting Director General in DTCT, Nonkqubela Jordan-Dyani, told MPs that the provisional liquidators who have already been appointed to oversee the SAPO would remain in place until a court appoints a business rescue practitioner.

If the State's bid to have the Post Office placed in business rescue is unsuccessful, the provisional liquidators will stay in place until a court decides whether the state-owned entity should be wound up for good.