DPE: New operating model for cash-strapped Denel agreed to
The department has told Parliament’s public enterprises portfolio committee on Wednesday that implementing the new business model will require funding.
CAPE TOWN - The Department of Public Enterprises (DPE) said while state arms maker Denel was still in dire financial straits, a new operating model for the state-owned entity had been agreed to.
However, the department has told Parliament’s public enterprises portfolio committee that implementing the new business model would require funding.
The committee was given an update on the state of a number of SOEs falling under the department earlier on Wednesday.
Director-general of public enterprises Kgathatso Tlhakudi said while Denel was still under financial strain, a solution was being worked out.
“We are happy to report that National Treasury is meeting the government-guaranteed obligations on Denel, but we need to implement a new business model for Denel, that requires money.”
Denel has been unable to pay salaries and has seen an exodus of highly skilled staff.
“We need to ensure Denel is structured as a much leaner and better-performing business going forward,” he said.
Tlhakudi did not say how much money would be required for Denel’s restructuring or what it would be spent on.
He told the committee that some staff who had left the company were willing to return once it was on a firmer financial footing.