Home South African Denel seeks R3.8 billion government bailout

Denel seeks R3.8 billion government bailout

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The arms manufacturer has struggled to pay salaries this year amid a liquidity crisis aggravated by the coronavirus pandemic

File picture: The Denel company logo is seen at the entrance to its business divisions in Pretoria.

STATE defence company Denel has asked for R3.8 billion in state financial support over the next three fiscal years, the National Treasury has told Reuters.

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 pandemic.

“Denel has requested a R3.8 billion bid over the 2021/22 to 2023/24 MTEF (Medium-Term Expenditure Framework) period,” the National 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 Africa’s most industrialised 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.

– Reuters