The Post Office’s debt exceeds it assets by R12.5bn, according to business rescue practitioners who gave their first update after two months at the helm trying to save the state-owned entity, reports BusinessLIVE.

Practitioners Anoosh Rooplal and Juanito Damons said the success of the business rescue process requires ‘arresting the cash flow bleed while also allocating capital to facilitate the company being able to service clients effectively’.

The government has committed more than R6.2bn in bailouts to the Post Office in 2023 on top of a cumulative R8bn in previous years, but as state finances come under increasing pressure, there may be resistance to continual bail outs.

The Post Office has run at a loss since 2013.

Rooplal said that since their appointment, ‘we have been working with management to address the decline in revenue, generate additional sources of revenue, reduce costs, effect key structural changes in the Post Office business model and consider key investment in technology and infrastructure to drive performance'.

Since taking over in late July, the business rescue team has undertaken an analysis of the branch network and looked at which branches are required and which need to be reopened.

Many are closed due to unpaid rent or have had their electricity cut off for non-payment.

The practitioners said the importance of re-opening branches had to be balanced with the costs incurred by the process and the lack of available funds.

It was stated in the update that Post Office employees were being paid and medical aid payments resumed in August so some benefits can be accessed by staff.

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