Denel gets R700m injection
Cape Town - State-owned arms company Denel will receive a much-needed R700m injection for its ailing aerostructure wing, Finance Minister Pravin Gordhan announced on Wednesday.
The recapitalisation of Denel Saab Aerostructures (DSA) would take effect in the new financial year (2012/13), he said.
DSA is a designer and manufacturer of complex metallic and composite plane parts for the military and commercial aviation sector.
In a press briefing late last year, Public Enterprises Minister Malusi Gigaba said DSA was the major contributor to Denel's losses, incurring a R237m loss in 2010/11.
Gigaba tasked newly-appointed group CEO Riaz Saloojee in November with concluding the process of turning around DSA.
Gordhan also announced the allocation of R350m to mining parastatal Alexkor, which mines diamonds on land and underwater in the Alexander Bay area of the Northern Cape.
According to the 2012 estimates of national expenditure, tabled by Gordhan on Wednesday, the R350m "is earmarked for transfer to Alexkor to settle any outstanding unfunded obligations under the Alexkor/Richtersveld community deed of settlement, including the tax obligation of R69.9m".
Following a 2007 settlement with the Richtersveld community, the company's land mining rights were transferred to the Richtersveld Mining Company (RMC) in March 2011.
RMC and Alexkor formed a joint venture in which Alexkor holds a 51% stake.
The document says pumping capital into both Denel and Alexkor will dramatically push up the public enterprises department's spending in the coming financial year.
The department was expected to spend R1.25bn in 2012/2013, compared to R353.3m in 2011/2012.
This would drop back down to about R200m leading up to 2015.