Denel gets conditional Treasury approval for debt-guarantee extension
THE Treasury has agreed in principle to extend Denel’s government guarantee of R1.85bn, which expires at the end of September 2017, on condition that it is significantly reduced by R650m by 2020.The state-owned arms manufacturer has raised debt on the basis of the five-year guarantee, some of which matures in September next year.Last week, the Treasury approved a guarantee estimated at about R5bn to financially beleaguered national airline SAA so that it could maintain its status as a going concern and finalise its annual financial statements for 2014-15 and 2015-16.Over the past few months, the Treasury has clashed with Denel over what it says was the company’s unauthorised establishment of a joint venture — DenelAsia — with VR Laser Asia, a company owned by Gupta-linked Salim Essa.Denel’s 2015-16 annual report tabled in Parliament on Monday said the group would submit a formal application to the Treasury for an extension of the R1.85bn guarantee during the current financial year. ...
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