Cash-strapped Denel, under intense pressure from lenders to improve governance, looks set to become the next state-owned entity after Eskom to undergo a management clean-up, starting with a new board. In December, the state-owned arms maker conceded it faced "severe liquidity challenges" and was forced to rely on government guarantees for emergency loans to pay salaries and suppliers. However, the Treasury said that Denel needed a long-term strategy to ensure it became financially sustainable. Treasury officials told Business Day in 2017 that lenders were demanding new leadership at Denel amid concern about corruption and corporate governance failures. Finance Minister Malusi Gigaba’s spokesman Mayihlome Tshwete conceded on Friday that "lenders have raised issues of governance — some of these related to the board".
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