Saab Grintek Defence’s bid to have Denel liquidated has been struck off the roll following an out of court settlement.
In a notice to the Johannesburg Stock Exchange on 7 October, Denel provided further clarification on the liquidation bid that was originally brought in June this year.
“Noteholders are advised that the matter has been removed from the unopposed motion roll where it had been enrolled for hearing on 11 October 2021. This is as a result of both parties having reached an out of court settlement,” Denel stated.
The liquidation challenge was spurred by a contract with Saab Grintek Defence to produced fire control computers for the SA Army’s long-awaited new infantry fighting vehicle (IFV). More than 240 Badger IFVs are supposed to be produced by Denel Land Systems at its Lyttelton factory with sub-contracts for components going to, among others Saab Grintek Defence.
In terms of the contract, Denel was supposed to supply Saab with specific equipment to fulfil its side of the deal. This did not happen and Denel apparently owes Saab R126 million, according to Business Day.
Denel is still facing a bid to have it placed in business rescue by employees acting under the Denel Employees Association (DEA). Denel owes employees R600 million in unpaid wages – most staff have not received full salaries since May 2020.
Denel is also facing a Johannesburg labour court application by trade union Solidarity for the payment of more than R60 million in outstanding salaries to some 950 Solidarity members.
Denel also owes suppliers more than R900 million. The company is expected to receive a cash injection from the state next month.
A team from the departments of public enterprises, defence and the Treasury has been working on a plan to provide financial support to cash-strapped Denel.