Denel warns of big funding gap for key capabilities
South African state arms firm Denel said on Wednesday it faced a funding gap of around R2.75-billion over the next five years for key capabilities.
Denel, which makes military equipment for South Africa's armed forces and export, is in the grips of a liquidity crisis aggravated by the coronavirus crisis.
It is one of a handful of struggling state firms the government has been keeping afloat with bailouts.
Interim Chief Executive Talib Sadik told a parliamentary committee that Denel had asked the defence ministry to provide R683-million in the current 2020/21 financial year to cover the funding gap for "sovereign and strategic capabilities".
Those capabilities are ones that if lost could threaten South Africa's ability to defend itself.
A presentation to the committee showed funding gaps of R635-million, R600-million, R431-million and R400-million in the subsequent four years for sovereign and strategic capabilities.
Sadik added Denel was taking steps to cut costs, reduce debts and dispose of non-core assets.
But he said difficulties paying full salaries this year had led some important technical staff to leave.
Denel board chairperson Monhla Hlahla said: "I believe that Denel can be saved if we just do it fast."
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