BL Premium reports that state-owned arms manufacturer Denel is in a rush against time to accelerate its restructuring, dispose of its noncore assets and find an equity partner in the hope that this will bring the company back from the brink of collapse.

Although its five-year turnaround strategy, which includes selling some of its shares and reducing its operating divisions from six to two (plus one subsidiary), is gaining momentum, Denel has yet to find an equity partner that is expected to inject capital into the cash-strapped firm. “We need another R4bn … without us restructuring the business, there’s no way we can survive in the next year or so,” interim CEO William Hlakoane said. Trimming its portfolio by selling stakes in Rheinmetall Denel Munition (RDM) and Hensoldt is expected to generate R2.5bn in revenue. The last day for interested parties to make binding offers for the shares was last week with a decision to be made on the winning bidders expected soon, Hlakoane said, without providing the names of the interested parties. Denel, which owes staff R650m in outstanding salaries and suppliers R900m, is one of many state-owned enterprises that have been embroiled in state capture. Reductions in headcount of key personnel in recent years have affected its ability to deliver on commitments in some of its top divisions such as Denel Land Systems. Denel lost more than half of its staff in recent years with the headcount falling from 3,500 employees in 2019 to 1,199 in 2021. It will take “deep pockets” for the arms manufacturer to retain or attract skilled specialists “because some of this people are in the Middle East where they are getting paid highly”. Despite the challenges, Hlakoane remains bullish about Denel’s challenges because there is “still a market for Denel’s products”.

• Read the full original of the report in the above regard by Thando Maeko at BusinessLive (subscriber access only)

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