Public Enterprises Minister Pravin Gordhan said the South African government is committed to rebuilding Denel, the cash-strapped arms manufacturer that’s missed payments on its loans.
The state-owned company had its bonds suspended by the Johannesburg stock exchange on Wednesday after failing to submit its annual financial statements on time and delaying interest payments on two notes and capital redemption on one of them. Denel and the government are finalising approvals for the payments, which will be made as soon as possible, the company said.
Read: Corrupt practices brought Denel to its knees – Zondo report
“Our next job is to rebuild Denel,” he said. “How this will be done in refloating Denel has still to be determined.”
Finding the money to rebuild Denel presents another problem for the National Treasury as it’s not the only state-owned company that needs government support to survive. The nation’s debt-laden power utility Eskom is seeking to restructure its loans as it struggles to keep the lights on in Africa’s most-industrialised economy.
Finance Minister Enoch Godongwana is scheduled to deliver his first annual budget on February 23.
A judicial panel investigating government corruption, referred to as state capture in South Africa, said on Tuesday it found that poor-quality appointments made to Denel’s board, including by Gordhan’s predecessor Lynne Brown, led to the company’s demise. The so-called Zondo Commission recommended some board members appointed in 2015 be further investigated for possible contravention of the Public Finance and Management Act.
Read: Second Zondo report details rampant corruption at Transnet and Denel
“The Zondo Commission report showed how deep the issue of state capture went,” Gordhan said. “Our lawyers are looking at various legal options, including criminal and civil, and how to recover lost monies.”
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Money will not be the problem.
There are no skills left to re staff this lot.
36
…. as with all SOEs. Cadre deployment has ruined our country. Competent people are now living and working elsewhere. Gordhan will rebuild in his dreams, its all hot air as per usual from the ANC. Its not going to happen, not now, not ever. And Gordhan knows it.
38
The skills are irrelevant; Gordhan wants to keep it as a convenient parking place for loyal ANC cadres to rape the taxpayer.
21
They could rebuild some parts of the Group (stop the stuff that was never clever) if they partnered with a leading global partner for its market access.
But who would, without an iron clad agreement regarding who runs the business? Nobody wants to try and manage a business with a government that sees SOE as an extension of ruling party policy.
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