Parliament - The South African Post Office is meeting with banks in search of a domestic loan package, backed by an extended government guarantee, to find R3.7 billion to stabilise its operations, Telecommunications and Postal Services Minister Siyabonga Cwele said on Tuesday.
“SAPO's financial stability continues to be our top priority,” Cwele said in his budget vote speech.
“This year, SAPO received a R650 million capital injection. This may look like a drop in an ocean as the company urgently requires about R3.7 billion to stabilise its operations and start implementing revenue-generating initiatives.
“I am confident that the CEO will soon finalise a domestic syndicated loan facility towards the required funding.”
Read also: Post Office strikers warn of ‘rolling mass action’
At a media briefing after the debate, CEO Mark Barnes said the post office's acting chief financial officer was holding an initial meeting with banks on Tuesday and he would personally have a follow up meeting with them on Monday.
“We have indications of interest from the banks for R1.8 billion out of a total of sort of R2.7 billion after the R650 million. So we are a third of the way at least in our fund-raising programme, which has got the support of the Treasury guarantee. Treasury came to the party by extending their existing guarantees for a three-year period.”
He clarified the R1 billion difference between the totals cited by himself and the minister consisted of money needed to service existing finance costs, telling ANA that these amounted to R350 million a year.
Cwele and Barnes said for the moment, authorities had managed to negotiate a stay in the labour strife that has plagued the post office and avert a threatened strike.
“We had a very successful engagement with the unions and within 24 hours of that engagement we were able to commit to a call-off of all labour action for at least a month,” Barnes told reporters.
Read also: Post Office to be profitable by 2018: CEO
He said management hoped to use this respite to secure funding, which would in part be used to address lingering labour grievances, which the Cwele termed a hangover from a decade of mismanagement.
“SAPO is correcting the maladministration of the past ten years by implementing the recommendations of the Special Investigating Unit (SIU) and the Public Protector, alongside its homegrown Strategic Turnaround Plan,” he said in his budget vote speech.
The minister also expressed relief over the negotiations with the union leaders, saying: “We are very happy that Mark has managed to engage the workers and the strike has been called off.”
AFRICAN NEWS AGENCY