Apart from voluntarily exiting the Airbus A400M components contracts to cut costs, Denel Aeronautics has lost its contracts with GKN and HondaJet due to its liquidity crisis.
This is according to the Denel annual report for 2018/19, which was released on 4 October. It noted that Denel Aeronautics recorded revenue of R833 million for the year, down from R1.107 billion the year before, and made a loss of R696 million, compared with R120 million the year before.
Denel’s liquidity crisis affected both its GKN and Honda work packages (Denel Aeronautics makes winglets for the HondaJet) “such that the severity of the delays could no longer be accommodated and derisked. Both customers have formally notified DAe of their intention to terminate their contractual agreements with DAe due to default by DAe and transfer their work packages to alternative suppliers.”
Subsequently, both customers terminated their contracts and finalised their damages claims against Denel Aeronautics. “It is worth mentioning that as per the contract, the total contract liability for GKN is capped at $10 million and for Honda at $5 million,” the annual report stated. (end of excerpt)
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