The embattled South African Post Office is near to raising R2,7bn in capital from the likes of banks, said CEO Mark Barnes.
The Post Office has suffered years of maladministration with the state-owned entity recording a R1,5bn loss in 2015.
A months-long 2014 strike also crippled postal services while public protector Thuli Madonsela earlier this year found the Post Office’s 2010 acquisition of a R161m, 10-year office lease to be irregular.
But government in January this year hired Barnes, the former CEO of private equity firm Brait, as the company’s new CEO in a bid to help turnaround the flagging company.
And after government gave the Post Office a R650m cash injection earlier this year, Barnes said that the company is nearing raising R2,7bn from banks.
“We’ve got a capital injection from treasury — that is the first stage,” Barnes said. “And there’s another R2,7bn of which we’ve got about 65% already.
“So, treasury stood up to the plate for R2,7bn of guarantees. We’re out there raising capital again since we’ve got like R1,8bn raised already,” Barnes said.
Barnes’s comments come amid looming strike action.
The Communication Workers Union (CWU) has threatened to launch a two-day strike on 5-6 May to demand annual pay increases. CWU also wants casual Post Office workers to become full-time employees with benefits.
On Thursday, Barnes said he hadn’t received notification from CWU about a strike, but he urged workers against taking their grievances to the street, especially as more capital funding is on its way.
“We’re six weeks away from getting the money,” Barnes said.
“We do have money coming and part of that money will be used to settle the past in respect of pay obligations and … to structure a forward deal, which we will sign up to, and that will include certain increases in the future.
“So often the race is won in the last few yards, or lost. And that’s my message to the unions: we are in the last few yards here,” said Barnes.
In parliament earlier this year, Barnes also said that Post Office could be profitable by 2018. Barnes said on Thursday that he’s still confident that the Post Office could achieve this feat.
“I’m absolutely confident. I’ve become more and more confident every day about the forward strategy,” Barnes said.
“We’re getting approaches from potential partners and service providers that are overwhelming. I can tell you we make our first little payment to creditors tomorrow, of some of the money that’s owed to them. They’ve all been very supportive.”
