The Post Office received R2.55 billion in two years and it wants another R3.8 billion

The South African Post Office (SAPO) has received cash injections totalling R2.55 billion between 2023 and 2024, with the state-owned enterprise seeking further funding of R3.8 billion.

Communications and Digital Technologies Minister Solly Malatsi revealed the significant capital injections paid to the SAPO in response to a recent parliamentary question from DA MP Patrick Atkinson.

Atkinson asked the minister for details regarding the bailouts, guarantees, and capital injections paid to each entity reporting to the Communications Department in the past five financial years.

Malatsi revealed that the Post Office did not receive any bailouts or guarantees in the past five financial years, but received capital injections totalling R2.55 billion over that period.

This total was spread over two years, with the Post Office receiving a capital injection of R2.4 billion in the 2023/24 financial year and another of R150 million in 2024/25.

Despite these capital injections and a combined R8 billion in historical bailouts from 2014, the SAPO has run at a deficit for well over a decade.

It was only in the 2023/24 financial year that the SAPO reported a surplus of R5.30 billion, a significant swing from the R2.12 billion deficit recorded the prior year.

However, the state-owned entity still reported an operating loss of R2.17 billion for 2023/24.

The Post Office’s consistent losses and high debt reached a boiling point in February 2023, when it was placed under provisional liquidation.

A few months later, Anoosh Rooplal and Juanito Damons were appointed the Post Office’s joint business rescue practitioners (BRPs).

Since the Business Rescue Plan was approved, the BRPs have implemented several measures to reduce costs at the Post Office and return it to a healthy and sustainable financial position.

This has included retrenching over 4,000 employees and cutting its branch network by 366 units.

As Malatsi said in his response, the SAPO also received a R2.4 billion capital injection from the fiscus in 2023/24.

This injection has been used to support the Post Office’s current operations while it is in business rescue, since many South Africans depend on the entity for essential services.

The capital was also used to partially pay retrenchment costs and debt repayments to creditors.

However, the Post Office’s BRPs have stated that the entity requires an additional R3.8 billion in funding to fully implement the Business Rescue Plan.

More funding needed

In 2024, the government promised to allocate R3.8 billion in funding to the SA Post Office, after the entity warned it would run out of money soon, risking liquidation.

However, this funding has yet to be allocated, with Deputy Communications Minister Mondli Gungubele previously explaining that the National Treasury required more proof that the funds would not be wasted.

In addition, in the Treasury’s third and final 2025 Budget, presented in May this year, no funds were allocated to the SAPO.

In March 2025, Rooplal told Daily Investor that the R3.8 billion was not a request from the Post Office or its BRPs.

“This R3.8 billion and R2.4 billion allocation was contained in the application to court to place the entity in business rescue,” he explained. 

“This was the basis on which the business rescue plan was approved. The monies were the basis of the plan and turnaround strategy.”

He clarified that the payment request was based on a prior allocation from the SAPO’s shareholder.

Rooplal said the R150 million injection the SAPO received, which Malatsi also revealed in his response, acted as working capital funds.

“This will provide temporary relief needed for the Post Office to continue to fulfil its internal and external financial obligations and continue to provide essential services to the communities it serves for the month of March 2025,” Rooplal said at the time.

He emphasised that the R150 million is not a payment or drawdown from the required R3.8 billion.

“The BRPs are eager to receive the funding indicated in the business rescue plan to satisfy the last obligation in the business rescue plan, which will allow them to file a notice of substantial implementation provided for in the Companies Act,” he said.