Post Office branches up for auction — R23.2 million minimum asking price

The South African Post Office (Sapo) has been fighting an uphill battle over recent years, and in the latest turn of events, it has put fourteen of its properties up for auction.

While most of the properties for sale are located in Gauteng, several are listed in the Free State and one in the Northern Cape.

The lowest reserve price of R60,000 is set for the property located at 276 Wessels Street in the Free State.

The one with the highest reserve price — set at R8 million — is also located in the Free State.

The reserve prices set for all fourteen properties add up to R23.2 million, and the first auctions are set to open on 7 March at 08:00 and close the following day at 12:00.

MyBroadband contacted the Post Office for comment, but it had not answered our questions by the time of publication.

MyBroadband also spoke to the auctioneers, Auction-All, who said that the property listings were voluntary.

The Post Office has decided to sell these properties because uptake of post boxes in these communities has declined significantly.

“Where they might have had thousands of post boxes rented out in the past, now only 30 or 40 are being used,” the auctioneer explained.

While the Post Office has set reserve prices on the auctions, it still has the right to decline offers it deems too low.

After the auctions close, the auctioneers said that they must first send the offers to the Post Office for final approval.

According to the auctioneers, they have a three-year contract with the Post Office.

The Post Office is in dire financial straits, explaining its decision to sell some of its properties on auction.

Communications minister Khumbudzo Ntshavheni recently said in answers to parliamentary questions that “…the Post Office does not have the required funds to settle its liabilities.”

In a media statement issued on Friday, DA spokesperson on communications Solly Malatsi said that the Post Office currently owes R485 million to its suppliers.

This amount includes R270 million worth of invoices that have remained unpaid for more than 120 days, and R119 million that are over 30 days in arrears.

“The devastation the Post Office causes to businesses, many of which are small medium and micro enterprises, with its failure to pay suppliers is destroying the livelihoods of many South Africans,” Malatsi stated.

Ntshavheni recently revealed that the Post Office had also racked up a debt of R304 million with landlords and R915,000 with municipalities in unpaid utility bills.

According to Ntshavheni, the outstanding amounts result from Sapo’s “constrained cash flow position” and added that its costs had exceeded its revenue, resulting in losses.

She explained that the closure of Sapo branches due to the debt would hurt its customers.

Ntshavheni also said that the branch closures would further impact Sapo’s revenue as they will not generate income.

She said that the Post Office had requested funding through the Medium Term Expenditure Framework to pay its bills.

She also explained that Sapo had developed a revised strategy, which it is currently implementing, to improve its operational and financial performance.

Sapo’s “constrained cash flow position” is nothing new, with South Africa’s deputy auditor-general Tsakani Maluleke declaring the state-owned company commercially solvent in April 2021.

According to Maluleke’s audit review, the Post Office had incurred losses of more than R1.7 billion, with its liabilities exceeding its assets by R1.5 billion.

Assuming the properties sell at their reserve prices, the R23.2 million accumulated only makes up around 8% of the R304 million owed to landlords.

Looking at its debt to suppliers, landlords, and municipalities as a whole, the R23.2 accumulated will cover 3% of the R790 million total.

Now read: Regulations to replace South Africa’s state of disaster could be presented next week

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Post Office branches up for auction — R23.2 million minimum asking price