Denel seeks R3.8-billion government bailout - TechCentral

Denel seeks R3.8-billion government bailout

A sign outside Denel’s offices in Pretoria. Image: Siphiwe Sibeko, Reuters

State-owned defence company Denel has asked for R3.8-billion in government financial support over the next three fiscal years, national treasury said on Friday.

Denel, which makes military equipment for South Africa’s armed forces and export, has struggled to pay salaries this year amid a liquidity crisis aggravated by the coronavirus crisis.

“Denel has requested a R3.8-billion bid over the 2021/2022 to 2023/2024 MTEF (medium-term expenditure framework) period,” treasury said in an e-mailed response to questions.

A Denel spokeswoman was not able to immediately comment.

State firms have been a long-term drain on the finances of the economy, requiring bailouts at a time of weak economic growth which have helped to lower its sovereign credit rating to “junk” status.

State agricultural lender Land Bank has asked for an extra R10-billion in government support over the next few years, it said this week.  — Reported by Alexander Winning, (c) 2020 Reuters

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