The South African Post Office (Sapo) on Monday got a much required R650 million equity injection as the state owned entity continuous to battle to survive.
Recently appointed chief executive, Mark Barnes, told the Parliament’s Portfolio Committee on Telecommunications and Postal Services on Friday that the company still needs further funds.
“I need to make it clear that if we do not get the full R2.5 billion, we cannot leave the harbour,” he said.
Barnes said that the company has had the term of its R2.7 billion guarantee extended by Treasury, but needs more money to to settle outstanding debt of R884 million.
He said that the parastatal is chalking up monthly losses of approximately R125 million, and despite claims that the company aims to be profitable in 2018, it is expected to record a loss of more than R1 billion in the 2015/16 financial year.
In the previous financial year it lost R1.5 billion, while the company forecasts a billion rand loss in 2017.
Business Day reported that as part of a turnaround strategy, Sapo will be forced into retrenching some of its 21,000 employees. The entity has already closed down approximately 25 of its 1,500 branches.
Barnes said costs represented 78% of revenue, which the company hopes to reduce to 40%, through cost cutting measures, and by increasing revenue.
A former banker, Barnes has said that Sapo is also in-line for a full banking licence which would enable the company to offer financial services products such as lending.
source: Business Tech