28 December 2017

South Africa: Minister Weighs in On Media Reports On Denel

There is no government decision on the possible selling of a stake in state-owned arms manufacturer, Denel, to optimise its financial position and there are no options presented for consideration as yet.

This was the assurance from Minister of Defence and Military Veterans Nosiviwe Mapisa-Nqakula on Thursday, following media reports attributed to a reply by Public Enterprises Minister Lynne Brown to a Parliamentary question.

"As correctly indicated in the response by Minister Lynne Brown, there is no government decision on the matter and no options presented for consideration yet. In an event that such a consideration or decision is made, government will have to carefully determine which parts of the Denel SoC should be sold, through which model and to whom," said the Minister in a statement.

The Minister said both the department and Armscor continue to engage with Denel to ensure that the country's strategic and sovereign capabilities are sustained and that any solutions to the current challenges do not have a negative impact on the operational readiness of the South African National Defence Force (SANDF).

"It is for this reason that we believe that any decision in this regard will have to involve due consultation with all stakeholders, especially the SANDF."

The Minister went on to express her concern regarding the media speculation, saying they may send a wrong message to the industry as well as the financial markets during sensitive negotiations on Denel's financial situation.

"It is important that we conclude the current discussions, and that any decision that government will make in this regard, will be an outcome of this important consultation."

Denel has recently been faced with financial challenges which gave rise to fears it would not be able to pay salaries.

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