The state-owned Postal Corporation of Kenya (PCK) is seeking approval from the National Treasury to sell part of its dormant assets, mainly land, to clear liabilities amounting to Sh7.2 billion and attract a strategic investor to revive its operations.
The corporation’s total assets are valued at about Sh11.2 billion, with land accounting for Sh7.9 billion, including a prime parcel at Nairobi’s Yaya Centre.
PCK Chief Executive John Tonui said a Cabinet memo proposing the balance sheet restructuring is currently before the National Treasury.
If approved, it will enable the corporation to settle its “historical” debts and pave the way for an investor with the financial and technical capacity to turn around the struggling entity.
“The Sh7.2 billion needs to be resolved first, and that is being handled through a Cabinet memo which is at an advanced stage,” Mr Tonui told the Business Daily in an interview on October 6.
“Once we get Cabinet approval, we can proceed to bring in a strategic partner. We want to make the process competitive and attract serious investors,” he added.
The corporation’s liabilities include Sh2.2 billion in unremitted pension deductions, Sh1.7 billion owed to suppliers, Sh2.7 billion in accrued taxes to the Kenya Revenue Authority, and Sh600 million owed to banks.
“The government has no money. We have done our best over the past three years, so we’re now looking at selling the assets we don’t need to settle these liabilities,” said Mr Tonui.
Posta is seeking a strategic partner for its courier and financial services divisions under a public-private partnership (PPP) model based on a 15-year revenue-sharing arrangement.
According to Mr Tonui, once the investor recoups its investment, the corporation could either revert fully to the government or be listed on the Nairobi Securities Exchange (NSE).
“The investor can be foreign, but we expect local participation through a consortium. The process will go through an expression of interest to ensure competitiveness,” he said.
The corporation plans to either sell the identified parcels of land to offset debts or transfer them to creditor institutions as settlement.
PCK continues to face stiff competition from agile parcel operators, including bus companies and courier firms such as G4S, as the traditional mail business dwindles.
Over the past two decades, the rise of Internet services and mobile communication—driven largely by Safaricom’s M-Pesa—has drastically reduced the need for physical mail delivery.
The number of letters handled by the corporation plummeted from 11.8 million in 2019 to 1.2 million in 2023, while Kenyans have also shunned money orders and inland parcels in favour of faster mobile money services.
“Cash flow remains our biggest challenge. Once we unlock funds through this restructuring, we’ll be in a better position to resolve some of the operational hurdles,” said Mr Tonui.
