Denel said that they could only pay employees 85% of their salaries for the work done in the month of June.
Group Chief Executive Officer, Danie du Toit said in a statement, “The management of Denel is working tirelessly to ensure that delayed portions of salaries will be reimbursed to employees as soon as possible.”
Du Toit says the management of Denel acknowledges the inconvenience caused by the decision, in particular the late communication. However, at the time the decision was made, the company had no alternative but to go this route.
Those staff members who bank with First National Bank will receive 85% of their salaries on Tuesday (June 25) and other employees on Wednesday (June 26).
“Due to ongoing liquidity challenges we are now faced with the unfortunate reality that the company is not in a position to fulfil the 100% salary obligation for June 2019,” Du Toit said.
The statement went on to say that the shareholders, the board and management are continuously working to find sustainable solutions to the liquidity crisis facing Denel.
“Government is cognisant of the fact that Denel is highly leveraged and in need of additional liquidity to rebuild the business, ” Du Toit said.
Du Toit assured Denel employees that management will always strive to meet the company’s obligations to them in line with their employment contracts.
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