State arms manufacturer Denel, hard pressed on every side to honour financial obligations, is reviewing its available skills base to take on contract work as its personnel numbers have been whittled down to 1 300 employees, some of whom are being back-paid while sitting at home. Photo: Reuters/Siphiwe Sibeko
State arms manufacturer Denel, hard pressed on every side to honour financial obligations, is reviewing its available skills base to take on contract work as its personnel numbers have been whittled down to 1 300 employees, some of whom are being back-paid while sitting at home. Photo: Reuters/Siphiwe Sibeko

Denel head pleads for two-month debt holiday to effect strategic plan

By Banele Ginindza Time of article published Sep 21, 2021

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STATE arms manufacturer Denel, hard pressed on every side to honour financial obligations, is reviewing its available skills base to take on contract work as its personnel numbers have been whittled down to 1 300 employees, some of whom are being back-paid while sitting at home.

This is as the parastatal begs its creditors for at least a two-month breather for it to realise value from the disposal of its assets.

Yesterday, acting chief executive William Hlakoane said: “It is not about the numbers, it is about the skill sets that we need; we might be sitting at 800 employees and realise we need 300 more with particular skills.

“It is what we are working on right now. Only once we have done our contract scrubbing will we know what we need. For now, legal obligations are detracting us from the processes we are going through.”

This comes as the beleaguered state entity last week squeezed out a R4 million payment for May to July 2020 salaries after trade union Solidarity pressed home a court judgment that Denel pays staff backpay.

“We are doing what we can, some of the employees are sitting at home for various reasons. We are unable to meet every obligation that we have, but we certainly do need a little time, say two months on the outside, to deal with our strategic objectives, not the government recap.

“But there are assets that we have put up for sale, we have done the evaluations. We really are at the tail-end of things,” Hlakoane said.

Solidarity said it would still pursue financial obligations for workers from August last year after various divisions of the entity defaulted on salary payments.

It said currently, the salaries paid only included salaries from May 2020 to July 2020, as specified in the court order of August 4, 2020.

However, on October 7 another case will be heard in the Johannesburg Labour Court in which Solidarity will challenge Denel on the outstanding salaries of every Solidarity member who worked at Denel from August 2020 to the present.

Hlakoane said the entity was equally obliged for the payment of salaries for non-unionised employees, some of whom formed part of the August 2020 to date salaries batch that still had to be paid. “We wish our employees would be understanding enough, we are not sitting on our laurels but of course they have every right to exercise their rights. The issue now is operational capacity.

“There are people we would want to retain, because of their skills. It is not about the numbers. For instance, an engineer earning R3 million a year. That salary would pay for more than one senior manager, but we need that engineer because of their skills set,” Hloakoane said.

Last week, Denel Employees Association applied to the high court in Pretoria, calling for Denel to be placed into business rescue and submitting papers naming the State-owned defence and technology conglomerate as first respondent.

Second respondent is recently appointed Finance Minister Enoch Godongwana, with Public Enterprises Minister Pravin Gordhan third respondent and the Companies and Intellectual Property Commission the fourth.

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