NATIONAL NEWS - The business rescue process of the South African Post Office (Sapo) is nearing completion.

The joint business rescue practitioners (BRPs) confirmed in a statement this week that substantial implementation of the approved rescue plan has been achieved and that the organisation is ready to transition to new governance structures.

The BRPs, Anoosh Rooplal and Juanito Damons, have approached the High Court in Pretoria seeking an order to formally bring the business rescue proceedings to an end and to authorise the filing of a notice of substantial implementation in terms of section 132(2)(c)(ii) of the Companies Act. The application, launched on 12 June 2026, is now awaiting a court date.

According to the BRPs, the move follows significant progress made in stabilising Sapo’s financial and operational position over the past two years, with the entity now trading as a going concern and meeting its liabilities in the ordinary course of business.

“The business rescue process has stabilised Sapo’s balance sheet and significantly improved its operational position,” the BRPs said, adding that the organisation is now operating from a more stable foundation than at the outset of the intervention.

Sapo has also reported improved financial performance for the 12 months ending 31 March 2026. Revenue increased by R2 million to R1.54 billion, while the net loss reduced sharply to R71 million, compared to R514 million in the previous financial year. This marks the lowest net loss recorded in several years and is presented as evidence of the effectiveness of the business rescue process.

The BRPs emphasised that the next phase of Sapo’s recovery will require shareholder-led intervention, including capital injection and the establishment of permanent governance structures. They have therefore requested that the court formally declare the business rescue substantially implemented, allowing Sapo to return to normal governance under its shareholder, new board and leadership structures.

A newly appointed board is expected to assume office on 22 June 2026.

“We congratulate the new board and wish them every success as they take Sapo to new heights following the stabilisation of the Sapo business rescue,” the BRPs said.

In preparation for the transition, Acting Chief Executive Officer Fathima Gany has established a High Care Leadership Team (HCLT) to oversee Sapo’s transition programme. The HCLT will coordinate operational continuity and focus on governance stabilisation, board readiness, risk management and long-term sustainability. It will report directly to the new board and will not replace its authority.

Sapo said the transition programme is aimed at preserving gains achieved during the rescue process while supporting continued recovery, including extending the cash cycle, expanding partnerships and pursuing revenue diversification and property monetisation initiatives.

Despite remaining challenges, Sapo said it is now operating from a more stable position following extensive restructuring.

Over the course of the business rescue, Sapo achieved several key milestones, including a major reduction in creditor debt from R8.7 billion to R440 million. More than 99% of the approved creditor distribution of 12 cents in the rand – amounting to approximately R1.015 billion – was paid by August 2024, significantly outperforming the estimated liquidation return.

Restructuring

A large-scale restructuring process also reduced the workforce by 4 342 employees through a section 189A process completed in April 2024, resulting in annual savings of approximately R1.2 billion. Monthly staff costs were reduced from R211.9 million to R115 million.

In addition, Sapo closed 366 branches while retaining 657, including strategically important sites serving rural communities.

The organisation’s financial position also improved materially, moving from a negative net asset value of R7.9 billion to a positive R840 million, rendering it technically solvent. Governance and internal control improvements were reflected in declining audit findings reported by the Auditor-General over the period.

Sapo also remained compliant with statutory obligations to SARS, retirement funds and medical aid schemes throughout the business rescue process.

However, the BRPs acknowledged that not all elements of the original turnaround plan were fully realised due to funding constraints. While an initial R2.4 billion government allocation supported creditor payouts, retrenchments and operational cash flow, a second tranche of R3.8 billion intended for capital investment and growth initiatives did not materialise.

As a result, several modernisation projects, including IT upgrades and digital expansion, will now fall under the responsibility of the incoming board and shareholder.

“Exiting business rescue is a positive step for this entity,” the BRPs said. “Sapo can and should play a critical role, especially in serving rural communities. We will provide detailed transition documentation and support to ensure continuity.”

The court’s decision will determine the formal conclusion of the business rescue process and Sapo’s full return to normal corporate governance.

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