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National Treasury has granted state arms manufacturer Denel a R1.8 billion lifeline.
Denel on Friday afternoon issued a statement saying the bailout would aid its turnaround plan. This comes after Finance Minister Tito Mboweni in July made a commitment to recapitalise the utility when he submitted the appropriations bill for 2019 to the National Assembly for consideration.
"We are grateful for the unwavering support that we receive from our shareholder, the government, and National Treasury. It demonstrates a confidence at high level for the measures taken by the new Board and management and a commitment to support us through the next stages of the turnaround," said Danie du Toit, Denel's CEO.
"The allocation forms part of a R2.8bn request, of which the additional R1bn will be considered in the 2020/21 budgetary process.
"The allocated portion will enable Denel to improve delivery performance and support to local and international customers. It will also bring relief to our partners and supply chains who have been affected by Denel’s liquidity issues in recent months," he added.
Denel said it would will carefully focus on managing its supplier base, executing projects on time and within budget. The company will also dispose non-core assets on an "urgent basis" and establish strategic equity partnerships across various divisions of the company.
