JOHANNESBURG --- South Africa’s state asset manager has quietly bought up almost 90 percent of cash-strapped arms manufacturer Denel’s bonds in the past 12 months, data from the country’s main securities depositary showed.
The previously undisclosed funding by the Public Investment Corporation (PIC), which manages 2 trillion rand ($140 billion) of investments for the government, sheds new light on the precariousness of Denel’s financial position.
It also shows the extent of state support for Denel at a time when private investors say they are reluctant to lend to the weapons company because of its previous management’s involvement in a corruption scandal.
Faced with a critical election next year, President Cyril Ramaphosa is fighting to keep struggling state-owned companies like Denel and power utility Eskom afloat. (end of excerpt)
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