DIRCO clarifies Sisulu’s statement on proposed Denel-Saudi venture


The Department of International Relations and Cooperation (DIRCO) has clarified comments made by Minister Lindiwe Sisulu about a proposed Saudi investment in Denel after she said talks were off.

On Friday, DIRCO said that the Ministry of International Relations and Cooperation “has noted with concern an article in the Mail and Guardian ‘Saudi stake in Denel is off, says minister’, dated 02 November 2018, suggesting that the proposed investment by Saudi Arabia on Denel has not proceeded due to a ‘personal matter’. The Ministry is concerned that some media houses have interpreted the ‘personal matter’ to mean the ‘Jamal Khashoggi matter’.
“The Ministry would like to put on record that the journalist was informed that matters of trade and investment are being dealt with by the relevant Departments, namely Trade and Industry, Defence and Public Enterprises and a number of factors are taken into consideration before a decision is taken.
“The Ministry would also like to state that the Minister of International Relations and Cooperation, Ms Lindiwe Sisulu, did not indicate that the deal is not going forward but that discussions are presently not proceeding due to the fact that Saudi Arabia is busy with internal consultations.”

According to the Mail & Guardian, Sisulu was quoted as saying “There was an offer from Saudi to invest in Denel, not buy a stake. At some point we did consider it, but we did not come [to] any conclusion.”

She told the Mail & Guardian that no deal had been reached and Saudi’s “personal challenges” were a factor, causing discussions to end. “So it would be out of context to be debating something that has not taken root or [been] formalised, or is not a possibility right now,” she said.

Saudi Arabia recently approached South Africa about an equity stake or partnership deals with Denel, with Saudi Arabian Military Industries reportedly seeking to invest in the company, which this week posted a R1.7 billion operating loss for the 2017/18 financial year.

Denel has also attracted interest from the United Arab Emirates and Qatar.

Sisulu’s comments were juxtaposed by those made by President Cyril Ramaphosa, who on Thursday said Denel was “ripe” for joint venture partnerships, but he hadn’t yet applied his mind to a bid for Denel by Saudi Arabia, or any of the other bids for the loss-making firm.
“It is one of those entities that is ripe for joint venture partnerships, where we would bring in an equity player with financial resources, new technology and so forth,” he told reporters in Johannesburg. “South Africa would obviously want to retain control.”
“There have been quite a lot of suitors, a number of countries and companies which are looking at Denel,” he said.

DIRCO said that South Africa has embarked on a programme to attract investments in different sectors and from different countries and added that South Africa and Saudi Arabia have strong bilateral relations, including trade.