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Post Office agreement with creditors likely to stabilise it: BRP

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The Business Rescue Practitioners (BRP) responsible for rehabilitating the South African Post Office say the current agreement that the entity and its creditors have reached is likely to put it on a sound financial footing.

They say about 70% of the Post Office’s creditors have voted in favour of business rescue instead of allowing the liquidation process to ensue.

Practitioner Anoosh Rooplal says the consensus reached has paved the way for all the creditors to receive 12% of what the Post Office owes them.

“By effectively getting the compromise, the entity writes off those creditors. In other words, we pay the 12 cents then we get the benefit because we are now discharged from the remaining 88 cents, that’s the compromise. Now by effectively writing back into the books, it will put the Post Office into a solid position. We got a private company to value all of the Post Office’s properties. It was sitting at about R2.2 billion. And that was last valued about five years ago on the books.”

Retrenchments

Meanwhile, Rooplal says their plan to retrench workers will not affect the operations.

Practitioners stated their plan to retrench 6 000 workers at and close down 420 branches after it was put in provisional liquidation earlier this year.

Rooplal says the plan aims to implement the turn around on cost savings, adding that job losses are necessary in this regard.

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