{"id":406760,"date":"2021-07-20T13:24:43","date_gmt":"2021-07-20T11:24:43","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=406760"},"modified":"2021-07-20T13:27:45","modified_gmt":"2021-07-20T11:27:45","slug":"meltdown-at-denel","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/business\/406760-meltdown-at-denel.html","title":{"rendered":"Meltdown at Denel"},"content":{"rendered":"

Denel is in a financial meltdown with debt of around R3.5 billion and cumulative losses of nearly R5 billion over the last few years.<\/p>\n

The once-proud arms manufacturer, with great products like the Rooivalk attack helicopter and the G6 self-propelled howitzer, has been gutted.<\/p>\n

Revenue has plummeted from R8.2 billion in 2015\/6 to R2.4 billion in 2019\/2020. With employee costs staying relatively stable, losses increased rapidly over the last five years.<\/p>\n

Corruption and mismanagement have turned the former innovative and profit-making company into another state-owned enterprise begging for money to stay afloat.<\/p>\n

Earlier this year, Denel executives told Parliament that they face a liquidity crisis, and their order book is significantly exposed to risk.<\/p>\n

They admitted that the company is inefficient, and there is a high probability that they will not meet their contractual obligations.<\/p>\n

Denel is in such a financial mess that banks and financial institutions are no longer willing to provide facilities that are needed for operations and winning new business.<\/p>\n

The company is therefore unable to raise adequate working capital or performance bonds for new contracts.<\/p>\n

The company is looking to the government for money. Denel has already received R2.3 billion in government bailouts since 2019 but wants another R3.8 billion in financial support.<\/p>\n

\"Denel<\/a><\/p>\n

Employees are particularly hard hit with infrequent and partial salary payments and an uncertain future.<\/p>\n

Helgard Cronj\u00e9, deputy general secretary for the public sector at trade union Solidarity, said from April 2020, employees have only received partial salaries in most instances.<\/p>\n

Denel Dynamics haven\u2019t paid employees their salaries for January and February 2021 at all. Some other divisions have paid partial wages of between 40% and 80%.<\/p>\n

Denel employees have also reported that their medical aid fees and pension fund contributions have not been paid for several months.<\/p>\n

Even the taxman is losing out. Cronj\u00e9 said the company has not paid pay-as-you-earn tax (PAYE) to SARS in most divisions of Denel.<\/p>\n

Cronj\u00e9 said the situation at Denel is still dire, with employees still not receiving their full salaries.<\/p>\n

Many employees have left the company, which saw its workforce shrink from 4,000 to around 2,000 in recent years.<\/p>\n

A large number of employees resigned to access their pensions. \u201cMany employees at Denel have resigned or went on pension to access their pension funds,\u201d Cronj\u00e9 said.<\/p>\n

He added that Denel Dynamics had lost a lot of technical skills, which put the company\u2019s future at risk.<\/p>\n

Cronj\u00e9 said government intervention is urgently needed as Denel\u2019s board and management team don\u2019t have any answers.<\/p>\n

He said the government should either recapitalise Denel or privatise it through strategic equity partners.<\/p>\n

Now read: Life at Denel \u2013 No salaries and a struggle to survive<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"

Denel is technically insolvent with debt of around R3.5 billion and cumulative losses of nearly R5 billion over the last few years.<\/p>\n","protected":false},"author":23,"featured_media":390260,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[19],"tags":[19625,35,67478],"class_list":["post-406760","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-denel","tag-headline","tag-helgard-cronje"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/406760"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/23"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=406760"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/406760\/revisions"}],"predecessor-version":[{"id":406764,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/406760\/revisions\/406764"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/390260"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=406760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=406760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=406760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}