Denel gets Treasury debt guarantee — now it can pay December salaries
State-owned arms manufacturer Denel has told unions it has money to pay employees their salaries on December 22‚ after Treasury gave it a debt guarantee. Denel and the union Solidarity confirmed this on Friday. The Treasury guarantee allows Denel to ask banks to further extend their credit next week. Unions met with Denel management on Friday to determine whether the 4,000 staff members would be paid after Denel admitted it is running out of cash. Solidarity manager Deon Reyneke said that despite the guarantee‚ the union did not know if Denel would get a bank loan in time. "We hope they will get a loan by next week‚ in order to pay on the 22nd." Business Day reported in October that banks were becoming apprehensive about lending to Denel. "Banks and other lenders had given the government an ultimatum to replace the Eskom board by November and that of arms manufacturer Denel by December, or have their credit facilities withdrawn‚" Treasury officials said.
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