Cash-strapped Denel still awaits R1bn state guarantee
The state-owned arms manufacturer needs a government guarantee to be able to pay its workers and suppliers
Cash-strapped arms manufacturer Denel has not received the additional R1bn guarantee it has requested from the government, a move that could have serious implications for its cash flow. Denel, which has government-guaranteed debt of R2.7bn, had asked for a further guarantee and a cash injection to recapitalise the business. It did not disclose the size of the requested cash assistance. The state-owned arms manufacturer, which along with other state-owned enterprises has been weighed down by allegations of mismanagement and corruption, slipped into such a severe financial crisis that in December it needed a government guarantee to be able to pay its workers and suppliers. Public enterprises minister Pravin Gordhan overhauled the entire Denel board in April 2018, saying the change was the first step the government was taking to restore good corporate governance at the entity.
The company on Tuesday confirmed that it had not, at the moment, received a further guarantee from the g...