Group is executing what looks like a coherently drawn up turnaround plan, though it has the backing of the government only on paper
The Denel company logo at the entrance of its business divisions in Pretoria. Picture: REUTERS/SIPHIWE SIBEKO
One could argue that Sadik, a chartered account, should be made a permanent CEO given his stellar reputation and track-record when he was in charge between 2008 and 2012. Under his leadership Denel was profitable and it continued to grind out profits for a few years after his departure before swinging into a loss of R1.7bn in 2018. Then the years of mismanagement and state capture followed.
Equity sales and partnerships involving businesses like Denel Land Systems, missile unit Denel Dynamics and Denel Aeronautics should help raise R4.4bn by the end of 2022. Improving the accuracy of demand forecasts, reducing staff costs and selling noncore businesses, including Denel Aerostructures, could net the company almost R900m in further savings, Denel’s board told a parliamentary committee almost a year ago.
In 2018 Denel held out a begging bowl, seeking R2.8bn cash to fund day-to-day expenses and carry through the turnaround plan. But finance minister Tito Mboweni allocated about 64% of that money, which came four months later than Denel expected and forced it to get a bridge loan to tide itself over until the cash came through.
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