PRETORIA --- South Africa’s state defense company has asked the government for a 2.8 billion rand ($200 million) cash injection to help it emerge from a financial crisis and secure lucrative export deals, its chief executive said.
Denel, a cornerstone of the country’s once-mighty defense industry, is one of several state firms whose finances were damaged by years of mismanagement during former President Jacob Zuma’s tenure.
Under current President Cyril Ramaphosa, public finances are stretched by the need to rescue other ailing state firms such as loss-making power company Eskom and South African Airways, which have both already received cash injections.
CEO Danie du Toit, appointed late last year to turn Denel around, said recovery efforts were progressing well and the company could win 30 billion rand in contracts over the next two years if it received help to overcome acute liquidity constraints.
“We have an excellent return on investment potential on recapitalisation,” he said in an interview at Denel’s offices outside Pretoria.
“Our products are still wanted, the brand is still respected, though of course there is still some nervousness about the financial state and sustainability.”
He said he hoped the cash injection would be announced this month with the first funds arriving in September or October. (end of excerpt)
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