Africa-Press – South-Africa. The provisional liquidators overseeing the SA Post Office (SAPO) have come out against a plan put forward by the Department of Communications and Digital Technologies (DCDT) to place the struggling entity in business rescue.
Just days before a court is set to hear the department’s application, provisional liquidators Anton Shaban and Gerry Musi have said they fear business rescue is “not an option” and will not work.
The Post Office was placed into provisional liquidation in March as it could not pay its debts.
In a statement on Friday, Shaban and Musi said that for business rescue to work, SAPO would need billions of rands in extra funding and a complete overhaul of its business operations. Parliament still needs to pass the Post Office Amendment Bill, they stated.
Instead of business rescue, the Shaban and Musi have put forward a compromise agreement under section 155 of the Companies Act.
This is the same section of the act used by retailer Steinhoff in its R25 billion settlement agreement with creditors and shareholders.
This section of the act allows a company to put forward a compromise agreement to creditors to bypass being liquidated or placed into business rescue.
Let’s compromise
Shaban said a compromise agreement was the best route to restore the Post Office to solvency. He said it could be done more quickly and at a lower cost than business rescue, without revealing any figures.
The DCDT, meanwhile, is hoping to convince the North Gauteng High Court in Pretoria that the SAPO is a candidate for business rescue when the matter is heard on Tuesday.
The department has nominated Anoosh Rooplal, the chartered accountant who has overseen the liquidation of VBS Bank for the past four-and-a-half years, as the Post Office’s business rescue practitioner.
“We are crossing our fingers that the court responds to our prayer favourably,” DCDT Minister Mondli Gungubele told a Parliamentary briefing earlier this month.
If the court declines to place the debt-laden state-owned entity into business rescue and the section 155 settlement proposal does not pan out, the SAPO will face a final liquidation hearing later this year.
For More News And Analysis About South-Africa Follow Africa-Press
