Denel sees light at the end of liquidity tunnel
Denel officials have now met with the Public Enterprises Department and said progress has been made in turning around the state-owned enterprise.
JOHANNESBURG - Arms manufacturer Denel said liquidity issues were short-term and the company was expected to generate positive cash flows within the next 12 months.
The company has been hit by liquidity problems over the past few months, which saw it unable to pay salaries on time.
However, officials have now met with the Public Enterprises Department and said progress has been made in turning around the state-owned enterprise.
The department said it was satisfied with the progress Denel has been making with regards to recapitalisation, expecting a marked improvement in the third quarter.
Following a meeting with the department, Denel said in the interim, the company was being supported by a group of lenders who were helping with liquidity.
It said restructuring of the company has already led to a reduction of R500 million in operating costs and savings of more than R15 million at Denel's corporate office.
The company said it anticipated that R2 billion would be generated from what it called strategic equity partnership activities.