Denel’s divestment of Hensoldt Optronics shares hits a stumbling block


Denel’s sale of its 30% stake in Hensoldt Optronics has hit a stumbling block after an offer expired due to a delay by the Department of Public Enterprises, but Hensoldt South Africa remains committed to acquiring the stake from Denel.

Denel’s sale of the stake is part if the loss-making state-owned company’s turnaround strategy – this has seen it exit its aerostructures business and put up other assets for sale, such as the Pretoria Metal Pressings Foundry.

On 24 February 2019, the Board of Denel approved the sale of Denel’s shares in Hensoldt Optronics to a prospective buyer subject to price negotiations and this proposal was submitted to the Department of Public Enterprises the following month. On 27 August 2019, the Board of Denel approved the sale of the shares in Hensoldt Optronics with an indicative price and subject to the Public Finance Management Act (PFMA) submission and approval of the sale. The sale was subsequently approved by the Minister of Finance.

The deadline to complete the transaction was 30 September 2020, but the Department of Public Enterprises only gave its approval for the transaction on 2 October 2020, which led to the offer expiring and negotiations having to take place from scratch.

According to Helgard Cronjé, trade union Solidarity’s Sector Coordinator for Defence and Aviation, if the transaction had taken place, R160 million in capital would have been made available to Denel.

defenceWeb understands that Hensoldt South Africa still hopes to acquire the 30% stake from Denel and the process is ongoing, with both Denel and Hensoldt willing to move the sale forward.

Hensoldt Optronics South Africa (part of Hensoldt South Africa) focuses on the design and supply of specialised optical payloads like the Argos, LEO and Goshawk airborne targeting and surveillance electro-optical systems. Hensoldt Optronics’ intelligence, surveillance and reconnaissance (ISR) and targeting gimbals have been fitted to a wide array of aircraft, such as the AHRLAC and Seeker, and are on every South African Air Force, Navy and South African Police Service aircraft that can carry a gimbal. The company also manufactures multispectral sensors, laser rangefinders, handheld observation systems as well as periscopes for the new build and retrofit submarine market, and has developed helmet tracking systems, which have been exported.