Denel welcomes Ramaphosa’s confidence boost 

In the wake of their financial troubles, state arms company Denel has welcomed President Cyril Ramaphosa’s confidence boost in their ability to turn their financial situation around after they were recently able to pay their staff their full salaries thanks to the help of a lender.

Earlier this week it was reported that they would only be able to pay 85% of June salaries due to liquidity challenges.

Speaking during Tuesday’s parliamentary state of the nation address debate, Public Enterprises Minister Pravin Gordhan announced that Denel staff would be paid their full salaries after a lender came forward to extend the necessary funds.

Gordhan did not name the lender.

“Honourable members: you would have seen news headlines today that Denel will only be able to pay 85% of staff salaries for June, due to liquidity constraints,” Gordhan said.

“However, later in the day, the latest update is that a lender has come to the assistance of Denel and full salaries will now be paid to all the staff at Denel.”

Ramaphosa briefly addressed the matter in his reply to the debate on Wednesday, prompting Denel to release their own statement in response.

“Denel welcomes the confidence in its ability to achieve a turnaround in the business and build a sustainable organisation, expressed by President Cyril Ramaphosa yesterday during the response to the debate on the state of the nation address,” read part of the statement.

According to Denel’s Group Chief Executive Danie du Toit, the company is busy with a comprehensive programme to restore good corporate governance, reduce costs and find new opportunities for growth, especially in export markets.

“The support given to us by the president in parliament will help us to position Denel as a reliable designer and manufacturer of world-class defence and technology systems,” said Du Toit.

“Our reputation took a severe battering with the revelations about state capture and widespread irregularities in the company, but we are taking determined steps to get it back on track. The positive sentiments expressed by both President Ramaphosa and Public Enterprise Minister Pravin Gordhan will help to restore confidence in Denel among existing and prospective clients, suppliers and employees,” he added.

Du Toit further added that Denel supported Ramaphosa’s vision of a new landscape in which state-owned companies had the expertise, leadership and appropriate financial models to fulfil their mandates.

“We are looking forward to working together in the Presidential SOE Council,” says Du Toit.

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