Registered users can save articles to their personal articles list. Login here or sign up here

Union demands bailout for South Africa defence group Denel

“It is a matter of time before Denel is completely destroyed,”

South Africa’s government must urgently inject at least R7 billion ($491 million) into struggling state-owned defence group Denel, the National Union of Metalworkers of South Africa (NUMSA) said on Friday.

Denel reported a R1.7 billion loss for the 2017/18 financial year and is struggling to pay worker salaries and deliver on roughly R18 billion of outstanding orders.

“It is a matter of time before Denel is completely destroyed,” NUMSA, which represents around a quarter of Denel’s workforce of around 4,000, said in a statement.

“Such an amount will go a long way, not just to pay Denel’s suppliers, but it will be sufficient enough to ensure a viable turnaround strategy,” the union said.

It was not clear how the union had arrived at the R7 billion figure.

Around 100 NUMSA members marched to the ministry of public enterprises in the capital Pretoria on Friday to press their demands. The marchers carried placards bearing slogans including “Bailout Denel or no votes next year” and “Denel not for sale”.

NUMSA and Solidarity, another union with members at Denel, have both rejected a management proposal to cut their salaries by around 20% from the end of November as part of short-term cost-saving measures.

But the two unions diverge over the need for an equity partner. NUMSA rejects the sale of stakes in Denel units but Solidarity sees it as a necessity for the company’s survival.

Reuters reported on Thursday that Saudi Arabia had made a $1 billion bid for a broad partnership with Denel.

South African President Cyril Ramaphosa last week said Denel was “ripe for joint-venture partnerships”. But he said the government had not yet weighed the Saudi bid or proposals from what he said were a number of other suitors looking to partner with Denel. ($1 = R14.2623)

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.


To comment, you must be registered and logged in.


Don't have an account?
Sign up for FREE

Oh really NUMSA?…..You should rather study economics…again, the taxpayers will not sponsor your commie anc socialist bailout strategy to support your vote anyj longer and even this fact is slowly entering their thick skulls, so suck it up!

End of comments.


Insider GOLD
ONLY R63pm

Moneyweb's premium subscription is a membership service which will give you access to a number of tools to take charge of your investments.
Or choose a yearly subscription at R630pa - SAVE R126

Get instant access to all our tools and content. Monthly subscription can be suspended at any time.



Follow us:

Search Articles:Advanced Search
Click a Company: