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The South African
19-05-2025
- Business
- The South African
SA Post Office thrown R381 million lifeline
In a move to preserve jobs and restore public confidence, Minister of Employment and Labour, Nomakhosazana Meth, has confirmed the implementation of a R381 million financial lifeline for the embattled South African Post Office (SAPO). The funding aims to stabilise the organisation as it continues its business rescue journey. The funding comes through the Temporary Employer-Employee Relief Scheme (TERS), administered by the Unemployment Insurance Fund (UIF). A Memorandum of Agreement (MOA) has been signed between SAPO and UIF to disburse the funds over six months, offering temporary relief to 6 000 workers while a long-term turnaround strategy is executed. 'This is a bold and necessary step to protect workers and restore confidence in our public institutions,' said Minister Meth. 'TERS is not just a financial mechanism – it is a strategic tool to stabilise employment, support economic recovery, and ensure that no worker is left behind.' The funds will be disbursed in monthly tranches via a dedicated TERS bank account, with strict auditing, governance, and compliance conditions in place. The SA Post Office, founded in 1792, has endured years of financial decline, culminating in a R2.17 billion operating loss in 2024. The company was placed under provisional liquidation in February 2023, but later rescued by court-approved business rescue practitioners (BRPs). Since then, SAPO has implemented aggressive restructuring measures, including: Closure of 366 branches , leaving just over 650 operational , leaving just over 650 operational Retrenchment of more than 4 300 employees in April and May 2024 in April and May 2024 Ongoing efforts to reduce losses and revive profitability by 2028 In addition to the TERS lifeline, the National Treasury granted a R2.4 billion bailout in the 2023/24 financial year to fund retrenchments, creditor settlements, and basic operations. However, the BRPs warned Parliament earlier this year that SAPO still requires an additional R3.8 billion to successfully complete its turnaround and restructuring plan. The TERS funding was approved following a rigorous review by the TERS Single Adjudication Committee, which includes stakeholders from the CCMA, Department of Higher Education, and Department of Small Business Development. SAPO is now required to: Submit regular financial and progress reports Uphold transparency and proper accounting Demonstrate tangible progress on its revitalisation plan Despite its financial woes, SAPO's corporate plan through to 2030 indicates optimism. The organisation projects progressive reductions in losses, aiming to return to profitability by 2028. This latest intervention underscores the government's commitment to job preservation and SOE reform, even as tough fiscal conditions demand accountability and restructuring. When last did you step into a Post Office branch? Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
14-05-2025
- Business
- IOL News
Tongaat Hulett's business rescue: Vision Consortium secures funding for lenders
Hippo Valley and Triangle Sugar are Tongaat Hulett units that supply Zimbabwe and the EU with sugar. Tongaat Hulett's Business Rescue Practitioners (BRPs) said they had received confirmation from the lenders, most South African banks, that they had received the balance of the funds owed to them by the Vision Consortium, the company that is taking over the struggling Southern African sugar group. This follows the Vision Parties confirming to the BRPs in April 2025 that they had secured credit approval to meet the payments of the balance of their obligations owed to the Lender Group, to enable the Vision parties to complete the acquisition of the claims and security. 'This represents a significant step forward in the successful implementation of the BR Plan and reinforces the BRPs' confidence in its ongoing viability,' the BRPs said in a statement.
IOL News
29-04-2025
- Business
- IOL News
Business Rescue puts Tongaat Hulett back on track
During this adversarial process the BRPs and Tongaat Hulett's senior leadership remain resolutely committed to implementing the Vision business rescue plan. Image: Supplied By Dave Howells Tongaat Hulett is unquestionably one of South Africa's most vital sugar producers. Tongaat Hulett continues to operate effectively and is firmly on the road to recovery in anticipation of the successful implementation of its business rescue plan. Business rescue is, by nature, a complex process that requires a careful balancing of competing interests while providing a lifeline to companies teetering on the brink of collapse. In the case of Tongaat Hulett, this lifeline has not only sustained the business and those who rely on it but also positioned the company to play a crucial role in securing the long-term sustainability of the sugar industry. This achievement is even more remarkable considering the company's dire situation just three years ago, when it lost R12 billion in value due to alleged accounting fraud committed by former senior executives. In consequence of the resultant financial distress occasioned by this alleged malfeasance, Tongaat Hulett entered business rescue in October 2022. The immensity of the challenge it then faced cannot be overstated: avoiding liquidation, stabilising operations, and, most importantly, protecting the thousands whose livelihood is and remains tied to its sugar and animal feed businesses. While civil and criminal proceedings against the former executives continue to progress slowly, we are pleased that the business rescue process is now nearing its conclusion. This is despite ongoing efforts by third parties to derail the process through vexatious and unsuccessful court challenges, which have cost money and diverted focus from the core objective: saving Tongaat Hulett's operations. The success achieved thus far is the result of collaboration between all stakeholders who are, and remain committed to developing and executing a viable business rescue plan that ensures long-term recovery. To this end, several potential Strategic Equity Partners were invited to participate in a bidding process. Following extensive engagement and multiple rounds of due diligence, the business rescue practitioners (BRPs) published two separate business rescue plans one from each of two consortiums, namely Vision Parties and RGS, in December 2023, for creditor consideration. However, late in the day before the scheduled meeting to vote on the two business rescue plans, RGS withdrew its proposed plan, leaving Vision's proposed plan as the only viable business rescue plan for creditors to consider. On 11 January 2024, Tongaat Hulett's creditors adopted and approved the Vision business rescue plan in terms of section 151 of the Companies Act 71 of 2008, with an overwhelming 98.5% of the vote in favour. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ This alternative option was also approved and adopted by the majority of creditors at the 11 January 2024 meeting referred to above. This remains a core element of the Vision business rescue plan and is being carried out with confidence and in strict accordance with due process. A critical part of the rescue effort has been securing funding to maintain operations. Thanks to substantial post-commencement support from the Industrial Development Corporation (IDC), Tongaat Hulett has successfully continued to run its mills in Maidstone, Amatikulu, and Felixton, as well as its refinery and animal feeds facilities. This has enabled continued employment, stable cane procurement from growers, and consistent production. Over the past three years, Tongaat Hulett has allocated R1.425bn to essential off-crop maintenance, ensuring the reliability and efficiency of its sugar operations. In the 2024/2025 season alone, R460 million has been spent during the off-season to prepare the mills and refinery to receive cane when harvesting begins in a few weeks. One of the more difficult, but necessary, decisions made during the rescue process was the temporary suspension of payments to the South African Sugar Association (SASA), in line with Section 136 of the Companies Act 71 of 2008. This decision was taken to preserve cash flow at a critical juncture and support the business's long-term survival. To obtain legal clarity on whether charges imposed by (SASA) such as levies under the Sugar Industry Agreement may be suspended during business rescue, the BRPs approached the KwaZulu-Natal High Court for a declarator in this regard. The Court ruled that such charges may not be suspended, a decision the BRPs believe carries serious implications for future business rescue efforts across South Africa and for Tongaat Hulett. Tongaat Hulett and the BRPs have appealed to the Supreme Court of Appeal (SCA) to seek clarification on the proper interpretation of Section 136(2)(a)(ii) of the Companies Act. While the appeal is pending, it is required that the disputed funds will be placed in escrow in accordance with the approved plan. Currently, the business is well-positioned to continue its transition toward a stable and sustainable future under the eventual ownership of Vision. Once Tongaat's business is transferred to Vision in terms of the business rescue plan, we are confident that the turnaround and strategic repositioning of Tongaat Hulett's business will continue to ensure that Tongaat Hulett remains a vital economic contributor in KwaZulu-Natal and across South Africa. Dave Howells is Managing Director of Tongaat Hulett Limited's South African Sugar business. Image: Supplied * Dave Howells is Managing Director of Tongaat Hulett Limited's South African Sugar business. ** The views expressed do not necessarily reflect the views of IOL or Independent Media. BUSINESS REPORT
