Arms firm Denel said on Friday it had received a R1.8-billion cash injection from government after a liquidity crunch left it struggling to pay salaries and suppliers in recent months. Government will also consider a request for a further R1-billion recapitalisation in it
Denel, a pillar of the country’s once-mighty defence industry, had asked the finance ministry for a R2.8-billion bailout to bolster a turnaround plan. But funds weren’t initially forthcoming.
“There is strong agreement that Denel is a strategic national asset that adds great value to the defence and security sectors,” the company said in a statement. It cited CEO Danie du Toit as saying the National Treasury had imposed conditions for the bailout that Denel would follow.
Denel, whose finances were hit by mismanagement under previous management, produces military equipment from ammunition and armoured vehicles to missiles and attack helicopters. Saudi Arabia’s state defence firm SAMI made a $1-billion bid last year for a broad partnership with Denel, but the approach was rebuffed.
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Source: eNCA
