The company has been granted an extension to repay its unsecured debt that was due on 10 June.
The management and board of Denel SOC confirmed the company has been granted an extension to repay its unsecured debt that was due on Sunday, 10 June. The extension is on a R290 million debt note that was taken up by Regiments Capital in June 2013, and a R400 million debt note in November 2015, and is a welcome relief to the company as it resolves its current challenges.
The extension of the term of the note is part of an overall debt restructuring programme to ease the liquidity constraints and buy time to restructure the overall debt of the company, while engaging critical stakeholders around a turnaround strategy.
The Denel board of directors spent the past weeks supporting the new acting group chief executive, Michael Kgobe and his management team review the existing corporate plan by scrutinising the profit and loss position of each division, so the company can start on a cost-effective and sustainable growth trajectory.
Following the appointment of Minister Pravin Gordhan as minister at DPE in February, the company has seen a number of key changes, starting with a new board and a new acting chief executive, who was appointed when the previous incumbent resigned, citing personal reasons.
The changes taking place in the company have been positively welcomed by employees and the public, including critical stakeholders; they have been viewed as a step in the right direction towards refocusing the company on its mandate.
“We are obviously very pleased with the extension, as it was always the most difficult portion of our debt. We are, however, not out of the underlying difficulties yet. The company requires more cash instead of costs, and we hope that each and every division has begun the tough journey to review how they can contribute positively to the turnaround journey that we have started. With the right focus and leadership, Denel can return to its role as a positive and key contributor to the defence and security of South Africa,” says the chairman of the Denel board of directors, Monhla Hlahla.