DENEL has told its staff it would be unable once again to pay their salaries, this time for June, as its liquidity position remained dire on competing priorities and declining sales.
The state-owned arms manufacturer told its workers last weekend that it did not have sufficient cash with various plans that had been undertaken slowly taking shape but yet to improve sales and the cash inflows.
It said it anticipated positive results in the next three to six months.
”However, at this stage, we do not have sufficient cash in our coffers and we do not foresee being able to honour our financial obligations for the month of June,“Denel said.
”Unfortunately, this includes employee salaries, related statutory and third party payments.”
Various divisions of the SOE had not been able to meet salary obligations for over a year, with the amounts of remuneration owed running over R500 million.
The communique said Denel was working extremely hard to unlock and to finalise sales for the month of June.
Denel has an appointment with the courts later this month to clarify its liquidity position against the existing attachment orders obtained by the United Associations of South Africa and other creditors.
Early this month, SAAB Grintek Defence approached the high court in Pretoria for the winding-up of the company.
It said Denel’s affairs should be handed over to a liquidator to allow its creditors to file claims according to the Insolvency Act.
The matter relates to a contract for SAAB to produce 211 Fire Control Computers for the Badger Infantry Combat Vehicles.
The deal is known as the Hoefyster Agreement.
Minister of Public Enterprises Pravin Gordhan, appearing before the portfolio committee on finance last month admitted Denel’s dire liquidity position but did not table proposals for state intervention.
BUSINESS REPORT