Denel is a national strategic asset of South Africa that has a critical role to play in ensuring that the South African National Defence Force is enabled in maintaining the sovereign defence capabilities of South Africa in an efficient and sustainable manner at all times. The company continues to work closely with our Shareholder representative, the Department of Public Enterprises and the National Treasury among key state institutions, to find a sustainable funding solution for Denel. We remain confident that an appropriate resolution within the context of the current economic challenges facing the national fiscus, will be found; and may include selling non-core assets, exiting non-core businesses, divesting from non-viable core businesses and ultimately repositioning our core businesses for long-term commercial sustainability. Any of these options, which I must emphasise, are at this stage under discussion within the company, are still subject to Board ratification and applicable PFMA provisions.

As things stand, the Government guarantee of R2.43bn has been further extended to R3.43bn over a 5-year period ending in September 2023. The debt portfolio consists of government guaranteed commercial paper totalling R2.864bn, with an unsecured note of R290m. The Board continues to support Denel in restoring the confidence of key stakeholders, including financial markets, in the company and the current leadership.

All salaries have been paid in full to all employees this month; and the company will always strive to ensure that such obligations, including paying creditors, are to the best of management’s abilities fulfilled – something that the current liquidity challenge obviously makes difficult.

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