FUNDING
No liquidity plan yet but Denel is sure it can pay staff
With the deadline for the state-owned arms manufacturer’s payroll looming, staff and service providers are concerned
Cash-strapped, state-owned arms manufacturer Denel says that although it is still finalising a plan to tackle its liquidity challenges, it will pay salaries and suppliers in January. With the deadline for the company’s payroll looming, staff and service providers are concerned that salaries and bills will not be paid. Denel received an emergency government loan guarantee of R580m in December to pay its 4,000 employees and suppliers. However, it is unclear how the company will raise funds to fulfil its obligations. The Treasury said it had provided the guarantee to Denel to resolve its "immediate funding crisis". The parastatal still needed to put a credible strategy in place, it said. Denel already has a government guarantee on its debt of R1.85bn. "The provision of the government guarantee is a short-term solution, and Denel still has to put in place a credible strategy, which must include a long-term solution with restructuring initiatives and an implementation plan to ensure Dene...
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