“The total that we would require over a three year period is capex [capital expenditure] of R2.6 bn and opex [operating expenditure] of R800 million, bringing the total to R3.4 bn. That’s the request that’s gone to treasury,” said Post Bank chief financial officer Nichola Dewar.

Dewar said significant investments were needed to improve efficiency at the Post Office, including investments in IT infrastructure, branch upgrades and e-business.

It was also impossible for SAPO to start the process of cutting over 5,000 jobs if the funding for the “rightsizing” was not immediately available.

“We haven’t been able to start that process because the funding has not been secured yet. In terms of the labour laws, we need a 60 day time period to start and complete that,” said Dewar.

SAPO board chairman Simosezwe Lushaba said the sooner government handed over the money, the sooner the turnaround plans would bear fruit.

“Timing is very important in terms of these investments. For instance… with rightsizing you got 60 days to finish it. It’s at a cost of R370 million. It saves R60 million a month in cash outflows,” said Lushaba.

“The earlier we do the investments in the change process, the earlier we receive the benefits…”

The R1.25 bn loans SAPO was seeking from the banks was linked to the R1.6 bn in guarantees granted to the post office last year to keep its going concern status.

Speaking to journalists after the briefing, SAPO acting CEO Mlu Mathonsi said they had already secured a portion of the R1.25 bn in loans needed from the country’s commercial banks, but declined to give details.

“We’ve been able to the get a tranche of investment from one of the commerical banks. We’ve been in discussions with other banks as well…and we’re also talking to the shareholder [government] to see how they can come into the picture and provide us with appropriate levels of funding,” said Mathonsi.

SAPO executives predicted the post office would suffer a R102 million loss by the end of this financial year and would reach profitability by 2017.

Also on Tuesday, SAPO announced in a media statement it had terminated the contract of its suspended CEO Christopher Hlekane.

SAPO said Hlekane’s termination would be effective from September 1.

“This effectively puts to an end the internal process which resulted from the institution and defending of a disciplinary hearing against him by the SA Post Office,” SAPO said in the statement.

“All the terms of the agreement were designed in such a manner that the finances of the SA Post Office were taken into consideration. The CEO will only be paid what he is entitled to in law and policy, e.g. outstanding leave pay-out and pension pay-out.”

The agreement paves the way for the appointment of a new CEO for the troubled post office which is battling to pay its creditors following significant revenue losses.

During the meeting with MPs, Lushaba was adamant that while they were negotiating exit packages for suspended executives, they would not agree to golden handshakes.

“We have agreed there are not going to be any handshakes – golden, silver or platinum to be payable in the separation,” said Lushaba.

Hlekane was suspended last year amid allegations of corruption and a crippling post office strike which added to the huge losses the post office suffered.