Post Office can be rescued, say business rescue practitioners

There is a reasonable prospect that the Post Office can be rescued within the ambit of the Chapter 6 of the Companies Act, the business rescue practitioners told the first meeting of creditors held on Monday.

Their opinion is based on the R2.4 billion bailout from Treasury in the medium-term budget, the additional funding requirement of R3.8 billion to recapitalise the Post Office, the business rescue practitioner interventions and the ongoing support from all stakeholders, including government, employees, trade unions and trade suppliers, as well as the Implementation of the restructuring plan.

The joint business rescue practitioners’ status was ratified by the creditors and the business rescue plan was extended to 30 November 2023 due to the size of the company, the large number of stakeholders that need to be engaged and sufficient time required to thoroughly investigate the affairs of the company.

The business rescue practitioners are Anoosh Rooplal and Juanito Damons were provisionally appointed by the High Court, but their appointment also had to be confirmed by the creditors.

The Companies and Intellectual Property Commission and Financial Sector Conduct Authority also approved the appointment and they achieved the 51% majority vote to ratify their appointment at the meeting of creditors.

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From provisional liquidation to business rescue for Post Office

The High Court granted an order on 9 February to place the Post Office in provisional liquidation, but the department of communications and digital technologies applied on 7 July to place the Post Office in business rescue.

The order was granted on 10 July 2023.

According to the Companies Act, the objectives of the first meeting is to inform creditors if there is a reasonable prospect of a successful business rescue, to receive valid claims from creditors and request an extension for the business rescue plan to be published.

“Our primary objective will be to either rescue the Post Office by restructuring its financial and operational affairs to maximise the likelihood of it continuing to exist on a solvent basis or if that is not possible, to ensure a better return for the company’s creditors and shareholders that would not have been possible to obtain from the immediate liquidation of the company,” Rooplal said.

He noted that the business rescue team need to thoroughly understand the business in order to draft an effective and qualitative Business Rescue Plan.

“We cannot simply put a band aid on this as the Post Office could be in the same position in a years’ time, which would be to nobody’s benefit.”  

A creditors committee will also be established with an independent chair to add significant value to the process.

The committee will consult with the business rescue practitioners about the proceedings, raise issues constructively and receive and consider reports related to the proceedings.

The business rescue practitioners also met with employees.

Damons said that the employees’ committee must represent all employees including unionised and non-unionised members.