Armoured-car and artillery manufacturer Denel Land Systems says honouring its wage bill in the next few months will be difficult as its cash woes continue.
In a memo on Friday to staff, which TimesLIVE has seen, CEO Mxolisi Makhatini said the embattled defence contractor's employees would get a net payout of just 20% of their salaries for May, along with medical aid cover and the risk portion of the pension contributions.
Denel Land Systems is one of Denel SOC's largest divisions, manufacturing land-based weapons systems such as armoured vehicles and heavy artillery.
Makhatini said operational requirements, payments to suppliers, statutory payment obligations and “our actual cash in the bank” had determined how much the company could pay its workers this month.
The situation was also unlikely to improve in the short term.
“As the company's liquidity status worsen (sic), the payment of salaries for the upcoming months will continue to be a challenge to honour,” he said.