South Africa’s state arms company, Denel as requested a R2.8-billion ($200-million) bailout from government.
Denel was once part of the country’s thriving defence industry but like many other state owned entities was mismanaged and affected by corruption during the former president Jacob Zuma years which lead to a financial crisis.
CEO Danie du Toit was appointed late in 2018 to oversee a turnaround plan for the company.
Du Toit says that the Denel is progressing well and he expects around R30-billion worth of deals to come into affect over the next two years but in order to achieve this the company requires a cash injection to help alleviate liquidity constraints.
Denel manufactures military equipment such as armoured vehicles, missiles, attack helicopters and ammunition for the South African armed forces as well as for export.
The CEO is hoping to receive the funds by September or October.
Last year Saudi Arabia’s state defence firm SAMI offered $1-billion for board partnership in the company but Denel do not want to sell equity in any of its divisions.
President Cyril Ramaphosa has been stretching public finances by issuing bailouts to state firms such as Eskom and South Africa Airways to keep them afloat but Denel are hopeful they will receive a cash injection.
This report does not necessarily reflects the opinion of SA-news