State arms manufacturer wants a R2.3 billion bailout


State-owned arms manufacturer Denel has asked the government for a R2.8-billion bailout to re-float its balance sheet and enable business opportunities following severe cash flow issues in June.

Last month eleventh-hour investor intervention was required to help the parastatal pay salaries after it emerged that it lacked at least 15% of the capital required to meet its monthly wage bill.

It’s unknown who the mysterious lender was that rushed to Denel’s aid in the end.

The corporation’s CEO, Danie du Toit, said provided they secured a substantial bailout from government, it could unlock value of R30 billion in the next two years through prospective deals.

Denel made $1 billion last year after it entered into a partnership arrangement with Saudi Arabian arms manufacturer Sami, but contrary to speculation, Du Toit said it was not necessary to offer up any further divisional equity to fund recapitalisation plans.

 


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