Treasury throws Denel a R1.8bn lifeline
The arms manufacturer has been battling to stay afloat for some months.
A Badger infantry combat vehicle gives a demonstration of the vehicle’s mobility on 19 November at the launch of the Badger at Denel Land Systems in Pretoria. Picture: Christine Vermooten
Embattled state arms manufacturer Denel, which has been struggling to pay salaries, has been granted a R1.8 billion bailout by government.
“We are grateful for the unwavering support that we receive from our shareholder, the government, and National Treasury. It demonstrates a confidence at high level for the measures taken by the new Board and management and a commitment to support us through the next stages of the turnaround,” said Danie du Toit, Denel’s CEO in a statement.
“The allocation forms part of a R2.8bn request, of which the additional R1bn will be considered in the 2020/21 budgetary process.
“The allocated portion will enable Denel to improve delivery performance and support to local and international customers. It will also bring relief to our partners and supply chains who have been affected by Denel’s liquidity issues in recent months.”
Denel also said it would carefully focus on managing its supplier base, executing projects on time and within budget. The company will dispose of non-core assets on an “urgent basis” and establish strategic equity partnerships across various divisions of the company, Fin24 reports.
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