A COMPANY under investigation for a questionable government tender looks set to partner with Denel after agreeing to buy 49% of its armoured vehicle subsidiary, LMT Holdings. The acquisition has been priced at R200m, plus a similar amount in loan finance. Denel introduced the company as a potential suitor for LMT just one month after President Jacob Zuma publicly instructed the Special Investigating Unit (SIU) in May to investigate Laman Financial Services, now renamed Kwane Capital. When Denel bought a 51% stake in LMT in 2012, it justified the acquisition on the basis it intended to use LMT as an in-house manufacturer for the R10bn Hoefyster contract to supply the South African National Defence Force with armoured vehicles. But the vast material of the work did not materialise and LMT has experienced severe cash-flow problems in recent months. In July, LMT’s minority shareholders approached the High Court in Pretoria to sever their relationship with Denel, alleging that Denel had ...
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