state arms company | Radio 94.7 FM

Despite having been paid a R100 million deposit almost two years ago, the state arms company Denel has failed to supply R250 million worth of army vehicles to the government of Chad.

In 2017, Chad bought 40 military Casspirs from Denel, but the company could not deliver them while officials squabbled over the ownership of the lucrative intellectual property (IP) rights – which had been given to the Gupta family for free – to build the vehicles.

Chad has since cancelled the contract and demanded its deposit back from the cash-strapped arms company.

Denel’s failure to deliver comes at a time when the firm is struggling with liquidity issues.

Last month, Denel received a much-needed bailout of R1.8 billion from Treasury.

At the time, Treasury said the company would get another billion next year.

In recent months the company, which has been implicated in state capture, has struggled to pay employees on time. At the end of
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South Africa’s state arms company, Denel as requested a R2.8-billion ($200-million) bailout from government.

Denel was once part of the country’s thriving defence industry but like many other state owned entities was mismanaged and affected by corruption during the former president Jacob Zuma years which lead to a financial crisis.

CEO Danie du Toit was appointed late in 2018 to oversee a turnaround plan for the company.

Du Toit says that the Denel is progressing well and he expects around R30-billion worth of deals to come into affect over the next two years but in order to achieve this the company requires a cash injection to help alleviate liquidity constraints.

Denel manufactures military equipment such as armoured vehicles, missiles, attack helicopters and ammunition for the South African armed forces as well as for export.

The CEO is hoping to receive the funds by September or October.

Last year Saudi Arabia’s st
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