Government has requested more information from the state-controlled Post Office about financial problems that threaten its survival.
Communications minister Mondli Gungubele said he wants the Post Office to provide him with a detailed account of its difficulties with a view to helping it transform into an “independent and profitable business”, he said in a statement on Sunday.
The Post Office was placed into provisional liquidation this month after a creditor went to court to recover rent owing. It’s since paid off the debt and may approach the courts to remove the order.
The company is also struggling to pay employees benefits, and announced plans in January to reduce working hours and lay off staff in a bid to cut wage costs, which account for 68% of its total spending.
“All necessary steps will be taken to ensure continuous provision of social services, timely grant payments, an efficient workforce and harmonious negotiations with the Post Office’s creditors towards favourable outcomes,” Gungubele said in the statement.
Read: Is it game over for the Post Office?
Finance minister Enoch Godongwana said in January that a regulatory framework is being developed to use the Post Office as a vehicle for a proposed state bank. The following month, he announced that the company would receive R2.4-billion from the national treasury this year to help implement a turnaround plan. — (c) 2023 Bloomberg LP