State-owned South African defence industrial group Denel is preparing an application for funding from the R13-billion contingency reserve announced by Finance Minister Tito Mboweni in his 2019/2020 Budget speech. “We know that [the] Government is cognisant of the fact that Denel is in need of additional liquidity to rebuild its finances,” stated Denel Group CEO Danie du Toit.
This is one of the reasons why the group is confident that the issues raised about it by international ratings company Fitch will be successfully dealt with. Fitch ratings recently cut Denel’s national long-term rating from AA– (zaf) to B(zaf).
In addition, the new Board and management has carried out a strategic business review and has developed a turnaround and growth strategy. This has included the determination of the scale and correct timing of Government support.