BL Premium reports that the SA Post Office (Sapo) collapsed into the arms of business rescue practitioners on Monday with a plan that puts 7,000 jobs on the line to save more than R1.3bn in annual salaries.

Business rescue is a court-ordered process that halts payments while turn-around specialists restructure the business. Communications Minister Mondli Gungubele said in court the entity needed to be saved as it played an essential role in providing grants and services in rural areas, which have limited access to financial services. He also pointed out that SA was a signatory to international treaties that required it to have postal services. The interim business rescue practitioners are Anooshkumar Rooplal and Juanito Martin Damons, subject to a vote by creditors and approval by the financial services regulator. The judgment acknowledged that Sapo, which owes creditors more than R9bn, was in financial difficulties due to structural issues. “The harsh reality is that the facts point to the SA Post Office’s workforce needing to be extensively curtailed for the Post Office to survive, but business rescue proceedings are prone to have a less severe impact on the workforce than final liquidation,” Judge Elmarie van der Schyff of the Pretoria High Court said. Sapo was placed in provisional liquidation in February. That forced the government to investigate placing the state-owned entity into business rescue to avoid final liquidation. It is estimated that Sapo employs more than 12,000 people, though the Communications Workers Union disputes this, saying it is not known how many are employed.

• Read the full original of the report in the above regard by Katharine Child at BusinessLive (subscriber access only)
• Read too, Post Office now the fourth SOE in business rescue, at The Citizen
• En ook, Poskantoor in sakeredding geplaas, by Maroela Media

Get other news reports at the SA Labour News home page