Denel says that with the bailouts it’s received, it can turn around in 2 years

denel says that with the bailouts its received it can turn around in 2 years

CAPE TOWN – Denel says the more than R3 billion bailout it has received will allow it to turn around the state arms manufacturer within the next two years.

The company said that it has been unable to hold on to key contracts or acquire new business because of a lack of liquidity.

Denel’s management appeared before Parliament’s portfolio committee on public enterprises on Wednesday to brief it on its turnaround strategy.

From a bloated organisation to working in silos, Denel’s chief restructuring officer, Riaz Saloojee, said that he knew where the mistakes were.

READ: Denel granted R1.8 billion bailout from Treasury

A former Denel CEO, Saloojee said that while the company was still in a dire financial situation, the medium-term budget windfall it scored would get it on the right path.

“2023 is a seminal year. It’s a point of decision for Denel. If we are not able in the 2023/2024 budget to execute this strategy and meet our financial targets, then I think we will have failed in our ability to turn Denel around and implement this strategy effectively.”

Denel has raised almost a billion rand from the sale of property and other non-core assets.

READ MORE: Cash-strapped Denel expects tough few months as it awaits bailout

Its order book currently stands at R12 billion.

Saloojee believes that there’s business of more than R30 billion that can be secured.

“Part of the problem is that we have not been able to execute them because of our liquidity crisis and hopefully now, with the recapitalisation, we are able to execute on the existing secure contracts.”

Denel said that all outstanding salaries of employees past and present had now been paid.

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