Government’s decision to recapitalise Denel will contribute to the comprehensive turnaround of the defence and technology company and help to create a sustainable asset for South Africa.
Danie du Toit, Denel Group Chief Executive Officer says the ZAR1.8 billion recapitalisation comes on the back of tangible progress of detailed plans to restructure the business, enter into strategic partnerships and find new markets for its high-technology products and solutions.
“We are grateful for the unwavering support that we receive from our shareholder, the government, and National Treasury. It demonstrates a confidence at high level for the measures taken by the new Board and management and a commitment to support us through the next stages of the turnaround,” he says.
There is strong agreement that Denel is a strategic national asset that adds great value to the defence and security sectors, but also contributes to broader efforts in the fields of technology, advanced manufacturing and skills development.
”The allocation forms part of a ZAR2.8 billion request, of which the additional ZAR1 billion will be considered in the 2020/21 budgetary process. The allocated portion will enable Denel to improve delivery performance and support to local and international customers. It will also bring relief to our partners and supply chains who have been affected by Denel’s liquidity issues in recent months.”
Du Toit says Denel will continue working hard in achieving the conditions that comes with the recapitalisation. Continued careful management of the supplier base, on-time and on-budget execution of projects is critical in the next 12 months.
Denel remains aligned with the shareholder’s expectations that it disposes of non-core assets on an urgent basis and establishes strategic equity partnerships across the various divisions of the company.