Sure as hell, things are not going well at Denel. In fact the state-owned defence conglomerate has been suffering a serious cash drought – so severe, Mr Nose has been told, that all its subsidiaries' bank accounts have been frozen and all cash income has been diverted to a central account controlled by Denel head office in Irene, all in order to meet the past two months’ salary bills.
“Whether it’s strictly correct practise or not doesn't matter; its an emergency," one finance manager is said to have declared. This has meant that since January even the creditors of profitable subsidiaries such as Pretoria Metal Pressings have either received no payments, or mere dribbles of cash – just enough to prevent panic.
The shortage is said to have been particularly severe in the “aero” structures, because of cancelled Airbus contracts – for which the government last year provided an emergency bailout of billions, but not enough to see Denel through to the end of the financial year and on to the next budget. On budget day all hopes were on Pravin Gordhan raining cash on their patch.
More cutbacks and retrenchments loom. Why else would Mr Nose’s joints ache so?
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