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Solidarity calls on govt to give struggling Denel financial support

The company announced that it is not in a position to pay May salaries and possibly subsequent months as well.

Picture: @DenelSOC/Twitter

JOHANNESBURG – Trade Union Solidarity said government should provide financial support to state arms manufacturer Denel as it goes through yet another cash crunch.

The company announced that it is not in a position to pay May salaries and possibly subsequent months as well.

Solidarity has laid the blame for the struggling company’s position on lockdown restrictions.

The union’s coordinator for defence and aviation Helgard Cronje said, “Government should either expedite the traffic of issuing export permits to expert the products to get money in or they should give them some kind of support because of the coronavirus pandemic.”

The company has had to come up with a turnaround strategy – which it says has steadily progressed.

While the state-owned entity (SEO) has managed to reduce operational costs by R1 billion, that is still not enough to get it out of the red.

When Denel found itself in a similar position, unable to pay salaries last year, the treasury stepped in.

Recently, Finance Minister Tito Mboweni appeared to embrace the idea of rescuing Denel when he spoke about the state of SOEs during a Parliamentary meeting.