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Fin24 reports that Denel wants the SA government to give it a R2.8bn financial boost, a spokesperson for the state-owned arms manufacturer confirmed on Friday.
CEO Danie du Toit had earlier told Reuters that there has been progress with a turnaround strategy for Denel and that a R2.8bn cash injection from government would be used to obtain potential export deals that could be worth up to R30bn. Du Toit was appointed CEO in December last year to try to turn Denel around. Denel is facing considerable financial challenges and it hopes to obtain the cash injection from government within the next two to three months. The spokesperson also confirmed that Denel did not intend to sell any stakes in any of its divisions to the Saudi Arabia state defence company SAMI. In June this year, Denel had to scramble to get enough money together to pay staff salaries for that month due to "ongoing liquidity challenges". At the last minute, Public Enterprises Minister Pravin Gordhan announced that a lender had come to the assistance of the company and that salaries would be paid in full to all employees. He indicated that Denel had implemented several turnaround measures, including renegotiating existing contracts, reviewing its supply chain and procurement processes to reduce costs, as well as reducing employee costs through voluntary severance packages.
- Read the full original of Carin Smith’s report in the above regard at Fin24
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