DA calls for Denel to be placed under business rescue

23 April 2021

The DA calls for Denel to be placed under business rescue as it is becoming apparent that the entity is facing imminent collapse.

This follows recent reports that its Denel Dynamics division is again not able to pay staff salaries.

The only rational way forward is to place the state-owned enterprise (SOE) under business rescue as bailouts and government guarantees will not be an answer to save the arms manufacturer.

The situation is dire:

The entity is broke and their financials are in disarray. Denel Dynamics has reportedly asked their staff to work relentlessly on contracts that were secured so that they may be paid on a future date.

Denel Dynamics are however, according to internal communications, not able to pay salaries for April.

Denel’s vehicle manufacturing division has come to a complete standstill and they also do not have the capital to finance tenders and contracts that are in the pipeline or to sustain itself.

It is for these reasons we believe there is no way forward other than for the entity to be placed under business rescue. If there isn’t an urgent intervention, the entire entity will collapse. It is important that business rescuers take over the running of the arms manufacturer and that they formulate a credible business rescue plan to get things in order at the entity.

Unlike the sham of a business rescue plan that we see playing out at the South African Airways (SAA), we want the process to be independent without any undue influence from the Minister of Public Enterprises, Pravin Gordhan, or from his department. It should be a process that follows the letter of the law and it shouldn’t be governed by the ANC’s factionalism or ideological beliefs, but in terms of the rules that govern business rescue processes.

Issued by Michele Clarke, Shadow Deputy Minister of Public Enterprises, 23 April 2021