Denel engages with contractor in view of move to liquidate
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DENEL, the state-owned arms manufacturer, announced yesterday that it was engaging with contractor Saab Grintek Defence to reach an “amicable outcome” regarding its bid to have Denel put into liquidation over unpaid debts.
In a brief notice to the Johannesburg Stock Exchange, Denel said “noteholders are referred to various press articles relating to an application by Saab Grintek Defence for the liquidation of the company. In this regard, noteholders are advised that Denel is currently engaging with Saab Grintek Defence to reach an amicable outcome and if need be, will engage its legal advisers to defend this matter.”
It emerged recently that Saab Grintek Defence was seeking to have Denel liquidated over a failed contract to supply 211 fire control computers for the SA Army’s Badger infantry fighting vehicles being built by Denel Land Systems.
The notice comes days after Public Enterprises Minister Pravin Gordhan admitted the state-owned enterprises’ financial woes to Parliament’s Portfolio Committee, but stopped short of making a firm commitment by the State on interventions.
Abigail Moyo, spokesperson of the trade union Uasa, said this week that the liquidation bid from Saab Grintek Defence, although warranted in terms of the current liquidity struggles suffered by Denel, could have been avoided had the State intervened in time as pleaded. Uasa said it was aware of other creditors also demanding long outstanding payments from Denel.
“We remain committed to assist our members through this new development. Should the liquidation of Denel prove to be the result of Saab Grintek’s court application or any other creditor that might now be prompted to approach the high court, we will step in to assist our members with their claims against the SOE by nominating our preferred liquidator for consideration to ensure a fair process,” it said.
Uasa, which has a writ on Denel, has pursued the lack of payments for the Denel workforce in various forums: Labour Court, Nedlac, Department of Employment and Labour, Department of Mineral Resources, the Ministry of Public Enterprises, Parliamentary Port Folio Committee.
It currently awaits a court date where Denel will have to explain its financial position and show cause why the writ against it cannot be executed.