Denel wants Defence Ministry to pay up

File: Denel’s executive has told Parliament it wants more than R680-million from the Defence Department to meet its sovereign and strategic responsibilities. Reuters/Siphiwe Sibeko

CAPE TOWN - State arms manufacturer Denel is looking to the Defence Ministry to help it out of its liquidity crunch.

It’s also in discussions for a loan from Treasury.

Denel’s executive has told Parliament it wants more than R680-million from the Defence Department to meet its sovereign and strategic responsibilities.

READ: Denel needs bailout to survive: Defence Minister

The company has not been able to pay its employees their full salaries since May because it’s not generating enough revenue.

It’s lost nearly 300 employees since April, many with highly-specialised skills.

Denel owes its creditors over R700-million.

READ: Denel 'not planning' on more government bailouts

It says it’s still waiting for Treasury to release a second tranche of a R1.1-billion bailout it received last year, intended to pay off its debt.

If it doesn't do this, the company says it can’t generate enough revenue to meet its other obligations.

"We have made that application for emergency funding to sort out our short term liquidity," said Talib Sadik, Denel acting CEO.

'We are looking at engaging with Treasury where we seek a loan and to secure that against proceeds of strategic equity partnerships and non-core disposals.” 

Source
eNCA