Denel salaries to be paid following rescue loan
Staff at cash-strapped state arms maker Denel will now receive their June salaries in full after a money lender came to the rescue of the troubled parastatal.
This was announced by public enterprises minister Pravin Gordhan in parliament on Tuesday night during the debate on President Cyril Ramaphosa's state of the nation address last week.
It emerged on Tuesday morning that some 3,500 employees at Denel were due to only receive 85% of their salaries for June due to liquidity problems.
"The latest update is that a lender has come to the assistance of Denel and full salaries will now be paid," said Gordhan.
Denel is among a range of state-owned companies that currently face serious cash-flow problems after many years of dodgy financial dealings and questionable business contracts at the height of state capture.
Addressing the National Assembly, Gordhan said that what was happening at Denel was a clear example of the devastating effects of state capture.
"There is no clearer example of the damaging effects of state capture than the financial strain and uncertainty the 3,500 Denel employees and their families may face each month if the company’s liquidity problems continues.
"Denel, our producer of military and aerospace equipment, is a crucial and strategic state entity that was substantially harmed by state capture," he said.
Gordhan said Denel was now improving its supply chain management practices and renegotiating some its contracts to beef its profit margins.
He said Denel also had a pipeline of contracts to the tune of R30bn.