Denel Defense Facing Liquidation.

Updated: Oct 9, 2021

Could the saga regarding the South African Defense and Technology Conglomerate Denel finally come to a resolution after this period of turmoil?

By Scott Morgan exclusively for Vanguard Global & Defence Unlimited.

Just days after it was revealed that once again the company would not be able to meet payroll for the month of September which been a common event over the last couple of years it has been announced that a date for liquidation application is heard in front of the North Gauteng High Court in Pretoria next week. The move is expected to trigger a new round of legal arguments surrounding the future of the company.

One of the most interesting points of this legal action is actually who filed it. Saab Grintak another defense firm filed the paperwork in response to not being properly compensated for work done on behalf of Denel. SME Intratech, another company that is based in Pretoria is also party to this action according to Trade Unions.

The financial collapse of Denel currently is and will have a negative impact not only on the South African Economy but also could impact the readiness of the SANDF (South African National Defense Forces). A report in August 2021 stated that the then liquidity of the company and other factors. would impact at least a dozen contracts that Denel was to provide equipment for the Military.

During a hearing in front of the South African Parliament it was revealed that new CEO was in place and a turnaround strategy for the company was in the works.

The three major concerns were providing Badger Combat Vehicles to the South African Army Of which Phase one ends in December 2022, upgrading 15 self-propelled howitzers (supposed to have been completed in June 2021 but now pushed back to 2023) and providing three G12 cannon for patrol boats under construction. The company also produces the Umkhonto Surface to Air Missile that is currently being used by the South African Navy.

The UASA (United Association of South Africa) has penned a letter seeking clarification on three points.

First will the state as sole shareholder oppose liquidation?

Secondly will Denel employees. receive all outstanding salaries and benefits?

Finally, will the DPE (Department of Public Enterprise the same or similar financial support that was offered to other State run companies such as South African Airways? These are three key points that deserve to be answered.

The hearing begins on October 11th, just the latest chapter in this saga.





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