Denel's Danie du Toit resigns after only 18 months at the helm
CAPE TOWN - Loss-making state defence company Denel yesterday announced the unceremonious resignation of group chief executive Danie du Toit after only 18 months at the helm.
Denel said Du Toit would leave in August, and a new head would be appointed soon.
The group could not disclose the reasons for his abrupt resignation was.
Denel, which provides defence, security and related technology solutions to clients both in South Africa and globally, saw its net loss widen to R1.75billion in its 2019 financial year, from R1.06bn the year before. Its balance sheet held debt of R3.4bn.
Although the government gave it R1.8bn of additional funding in August to clear debt, the group has spent much of this year struggling with liquidity problems and has, according to reports, been unable to pay staff full salaries through the months of the Covid-19 pandemic.
It has a turnaround plan that focuses on protecting promising business lines, disposing of non-core assets and seeking strategic partners to increase access to international markets.
“The board has taken far-reaching steps to stabilise the business and prepare Denel’s long-term sustainability,” the group said yesterday.
Evidence that a turnaround plan was being implemented included the invitation from Denel Pretoria Metal Pressings (PMP) at the end of last month for bidders to buy its casting and rolling plants and cutting and cupping plants.
Denel had announced plans to sell equity stakes in loss-making business Land Mobility Technologies and Denel PMP last year, and, according to the DefenceWeb website, in June this year Denel said it planned to exit or sell Denel S3, Gear Ratio, its properties division, PMP Foundry, the aero structures business, Mechem, Spaceteq, Densecure and Optronics.
In its 2018/19 annual report, Denel said it planned a moderate growth in revenue from R3.86bn in 2020 to R5.54bn in 2021 and R7.14bn in 2024.
It claimed, at the writing of the annual report, to have received expressions of interest from more than 40 international and local defence and technology companies that were considering partnering with the group or acquiring parts of its business.
Denel claimed in its annual report to have “secured a solid order backlog of R18bn, which covers roughly four years of sales revenue”, in addition to “pursuing a winnable order pipeline of R30bn over the next 24 months”.