Sapo boss cries out for more funds
SOUTH African Post Office (Sapo) chief executive Mark Barnes has no regrets about taking up the position he assumed three months ago‚ but says he vastly underestimated the challenges in turning the struggling company around.
The challenges‚ he said after briefing parliament’s telecommunications and postal services committee last week‚ “spur me on”. And despite Sapo being on the point of collapsing under the weight of creditors and a lack of funding‚ Barnes is optimistic that it can pull through and points to the success of modern postal services across the world.
On Monday, the parastatal got the R650-million allocated to it in the budget and has had the term of its R2.7billion guarantee extended.
But‚ it needs more to settle outstanding debt‚ which amounted to R884-million in the middle of last month. Sapo is in talks with the government for more state funds.
“We need the cash and we need it now‚” Barnes said. The turnaround strategy will involve voluntary severance packages and early retirement for some of Sapo’s 21 000-odd employees though no numbers were disclosed.
He said the company was notching up losses of about R125-million a month and if it did not pay creditors within the next few weeks‚ its very existence would be under threat.
Delays in paying creditors made it increasingly difficult to continue ope Sapo needed R2.7-billion‚ Barnes told MPs. It already has loan commitments of R1.8-billion‚ but needs an additional R900-million. Barnes said having a government guarantee was no longer sufficient to persuade banks to lend Sapo money.
A key feature of Sapo’s future growth strategy is to claw back the market share it has lost to the private sector for the delivery of corporate mail‚ post and parcels. — BDLive