Denel group CEO Danie du Toit has on Tuesday, sent his employees an email stating that July salaries were not certain.
“The management of Denel has yesterday informed employees of the reality that the company remains at risk of not being in a position to pay salaries for the month of July on time. Danie du Toit, the Group CEO of Denel, indicated to employees that they are in constant engagements with the banks to secure bridging finance to support the company,” said Denel spokesperson Pam Malinda.
According to the statement, the challenge is connected to the current liquidity challenges experienced by Denel. Denel CEO Danie du Toit said these liquidity challenges also resulted in a delayed payment of full salaries and late payments of the employer’s contribution to the Denel Pension Fund in June.
In June, Denel could not pay full salaries to its employees. It told workers they would only receive 85% of their salaries for June, and also paid pension fund contributions late. At the time, Du Toit and Public Enterprises Minister Pravin Gordhan said the cash flow problems were a result of state capture.
During the State of the Nation Address debate in Parliament, Gordhan said a lender came forward, allowing Denel to pay full salaries.
“Once again, I do apologise for the stress and anxiety caused to you and your families as a result of the current uncertainties. I thank you for remaining loyal to the company and for the personal sacrifices you are making for the company, however, it was important to note that the implementation of the turnaround plan was in full steam.”, said du Toit through the statement.
Whilst Denel was confident that it would soon be recapitalised, it should be expected that the next few months would be very tough.
