Denel confident of getting out of deep hole
Future prospects of Denel remained bright and the state-owned company was confident that it would return to financial sustainability.
Future prospects of Denel remained bright and the state-owned company was confident that it would return to financial sustainability.
The arms manufacturer was restructuring to reduce costs and exit from onerous contracts.
“The measures taken to improve corporate governance and take firm action against individuals involved in irregularities will further strengthen the reputation of Denel,” the company said in a statement.
It said the firm was at a “critical stage in its transition to, once again, become a respected defence and technology company within the local and global arenas”.
READ MORE: UPDATE: Denel promises to pay salaries in full
However, the 2018/19 financial year was difficult for the company as it announced low revenue, a drop in exports, liquidity constraints and a net loss of R1.7-billion – a loss R696-million higher than the previous year’s.
“The focus is now to rebuild trust, respect and credibility with all stakeholders,” the company said.
“The board and management are determined to succeed. Failure is not an option.”
At the beginning of last month, the company received a R1.8-billion bailout from the government.
The cash injection was almost two-thirds of the R2.8-billion the state-owned entity had requested for.
Meanwhile, the DA wants access to the preliminary investigation pertaining to the allegedly unlawful Gupta-linked deal Denel entered into with Chad.
READ MORE: Struggling Denel to receive R1.8-billion bailout
Last month, DA MP Natasha Mazzone claimed that Denel had failed to supply R250 million worth of army vehicles to the government of Chad.
“[This] despite having been paid a R100 million deposit almost two years ago,” Mazzone said.
“Chad has since cancelled the contract and demanded its deposit back from the cash-strapped arms company – this has impaired South Africa’s relations with Chad.”
She said it was in the interest of South Africans that the result of the preliminary investigation be made public.
Mazzone said the party would also be submitting questions, to minister of public enterprises Pravin Gordhan, to find out if there are any other contracts Denel cannot deliver on.
READ MORE: UPDATE: Solidarity still concerned about Denel’s survival
“The DA will continue to fight for the rooting out of corruption in all state-owned enterprises and will not back down until all implicated government officials are brought to book for their abuse of state resources.”
Denel did not respond to requests for comment on this matter.
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