SAPO tells MPs it is facing 'day zero', warns of liquidation unless it gets cash injection

CAPE TOWN - The South African Post Office (SAPO) says it's not out of the woods yet and is facing "day zero" where it will run out of funds, putting it at risk of liquidation.

The state entity has told Parliament that "day zero" could arrive as early as October unless it receives a financial injection. 

SAPO was briefing Parliament's Communications and Digital Technologies portfolio committee on the business rescue process and its financial state.

But there are "green shoots", according to the department, and the Post Office is sitting with a "positive" net asset value. 

SAPO was on the brink of being liquidated last year before it was ultimately placed under business rescue. 

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However, while there have been slight improvements since then, the entity is still staring "day zero" in the eye unless it receives urgent funding. 

Acting CEO Fathima Gany said that without any further capital from the fiscus, they would only have cash until the end of next month. 

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"With day zero looming large, the BRPs [business rescue practitioners] are obliged to consider the provisions of section 141 (2) of the Companies Act 71 of 2008," she said.

Gany warned of the consequences of liquidation.

"All jobs will be lost and business operations will cease, except only those operations that will be needed to wipe up the company," said Gany.

The committee said it was not happy with the Post Office report and the fact that the issue of "day zero" was raised just a month before it happens.

A follow-up meeting is now expected with the committee before the October cut-off.