LMT Products, the trading company of LMT Holdings, is now under the control of a consortium of local investors after being placed in business rescue earlier this year, with Denel no longer having control of the company.
On 2 September this year, the board of LMT Products adopted a resolution in which it voluntarily commenced business rescue proceedings. The company appointed Sipho Eric Sono from OPIS Advisory to be its business rescue practitioner on 4 September. Denel was the majority shareholder of LMT Holdings but the underlying business was with LMT Products (LMT Holdings was 51% owned by Denel, 29% by Pamodzi and 20% by the founding members and included LMT Products, LMT Engineering and LMT Properties). “As such upon the voluntary business rescue proceedings, Denel no longer has control of this entity,” Denel said in its latest annual report.
Subsequently, the business rescue plan of LMT Products was accepted by creditors on 30 October. A new consortium of local investors provided the funding for the business rescue as well as working capital for the company. The new shareholders of Land Mobility Technologies (Pty) Ltd include, amongst others, Stefan Nell (former LMT CEO), Andy Hodgson and Chris Giliomee who founded the company 20 years ago.
The new management team said the survival of the company ensures the continued employment of 71 skilled people, and the company will continue to trade as LMT Products.
LMT Products, which as a 100% owned subsidiary of LMT Holdings, designed and manufactured a variety of protected products, ranging from protected cabs for Mercedes Benz, to the LM8 and LM13 vehicles for a Middle Eastern customer. LMT was also responsible for the introduction of the Patria vehicle into the Hoefyster programme back in 2004, more than 15 years ago, after having won the local design competition for an 8×8 design initiated by Armscor in 2002.
LMT has been hard hit by Denel’s liquidity crisis. It only managed to pay partial salaries in July and struggled to pay August salaries due to cashflow problems, for example. Part of LMT’s issues stem from contracts for the Badger infantry fighting vehicle being diverted to VR Laser, which has subsequently been closed down.
LMT recorded revenue of R103 million in the 2018/19 financial year, compared with R116 million the year before, and a loss of R90 million, compared with a loss of R220 million the year before and loss of R23 million in 2016/17.
In May 2012, Denel acquired 51% of the issued ordinary shares of LMT Holdings to broaden its landward capability for a new product range. 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.