Land Mobility Technologies (LMT) is doubtful it will be able to pay August salaries in time, after only managing to pay partial salaries in July.
A letter from LMT management sent to LMT employees on 20 August and seen by defenceWeb states that “it is with great regret that we have to inform you that August 2019 salaries will most probably not be paid by the 25th of the month as per the usual agreement.
“Given the circumstances with our shareholders and our current cashflow projection, we cannot confirm the payment date as yet. As soon as more information becomes available, you will be informed immediately.
“We want to assure you that we are doing everything we can to collect the money owed to us by our Customers.”
Earlier this month it emerged that LMT, in which Denel has a 51% holding, struggled to pay July salaries, with not all staff receiving their wages. This comes as Denel contemplates disposing of the loss-making company. By mid-August, only 25% of LMT salaries had been paid by Denel.
According to the latest Denel annual report, LMT employs 178 people. In the 2018/19 financial year LMT only made up 2% of the Group’s revenue contribution, bringing in R118 million, of which R105 million was from exports. The company made a loss of R174 million, up from a loss of R4 million the year before.
Part of LMT’s issues stem from contracts for the Badger infantry fighting vehicle being diverted to VR Laser, which has subsequently shut down.
LMT specialises in the design and manufacture of armoured vehicles with protection against ballistic, landmine and improvised explosive devices (IEDs). Its design capabilities provide for the integration of protection technologies into the armoured vehicles with, amongst others, flat or semi-flat floor landmine protection. Denel acquired its 51% stake in LMT in May 2012.