Trade union Uasa has expressed the view that the recent downgrade of South African defence industrial group Denel by international ratings agency Fitch was “disappointing” but not surprising. State-owned entity (SOE) Denel is suffering from severe liquidity problems.
“Fitch stated as a reason that management volatility may impact the group’s ability to implement its turnaround strategy,” observed the union in a statement on Friday. “With a CEO coming on board and resigning before any rescue plan could yield results, Denel is now looking to a new CEO who is expected to save this already sinking ship.”
Uasa expressed regret at the current state of Denel. It pointed out that it had had to take the company to court to get it to pay its employees their salaries. But the group still had not done so, despite a court order. That failure illustrated the depth of Denel’s deterioration.
“Sadly, South Africans cannot afford any more bailouts,” highlighted Uasa. “The country is at a low point after the devastation of the Covid-19 global pandemic and years of corruption.”