The South African Post Office (SAPO) is set to receive a R381 million wage subsidy from the government to help cover employee salaries for the next six months as part of its business rescue process.
This funding is intended to provide financial relief to nearly 6,000 employees and reduce the organisation’s cost pressures. It comes from the Temporary Employer/Employee Relief Scheme (TERS), which offers up to 75% of employees’ salaries for companies in distress, with a cap of R241,110 per worker over a 12-month period.
The wage support is being described as a crucial step in stabilising SAPO and forms part of the broader strategy to complete its financial recovery. To access the funds, the Post Office had to submit a viable turnaround plan believed to have a reasonable chance of success.
Read:Missing person alert: Find Mundo Nkabinde in South Africa
While the amount is significantly less than the R3.8 billion requested by the business rescue team last year, it marks progress in efforts to restructure the state-owned entity. The subsidy also provides a platform for the development of new revenue-generating strategies for SAPO’s long-term sustainability.
This latest intervention brings the total government support for SAPO to nearly R9.8 billion since 2014.