The trade union UASA has been informed by Denel acting executive human resources manager, Thulani Mahlinza, that salary payment for Denel employees is at risk for September 2018. If Denel employees do not receive any further income this week, the company will not be able to pay its employees’ salaries which is due on Tuesday, 25 September 2018. Mahlinza requested UASA to give Denel's executive management opportunity until 14:00 on the 21st of September to discuss the situation with all role players.
Management eventually contacted UASA to confirm that all UASA members would receive their full salaries on Tuesday, while executive and senior management would only receive 80% of their salaries, with the balance to follow on 14 October 2018, said Willie van Eeden, Sector Manager of UASA. "While we are very relieved that our members will be paid in full and on time, we find it unacceptable that our members must be subjected to this kind of anxiety," said Van Eeden.
UASA again calls on the Minister of Public Enterprises to intervene in the matter with a view to find lasting solutions that will remove all anxiety and will ensure the viability and sustainability of Denel.
On 18 September 2018, Denel gave feedback regarding its financial position:
- Denel is expecting a nett loss of R1,8 billion for the 2018/19 financial year.
- Denel has a fixed monthly cost base of +-R300 million.
- Denel divisions combined need funding of close to R1,3 billion to remain operational to end March 2019.
- Whilst a R1 billion guarantee was approved by treasury earlier this year, R400 million was used to pay debt.
- A further R1 billion guarantee was requested to ensure operational stability - this was rejected by treasury as treasury requested Denel to seek equity partners or sell assets not in use, to generate cash.
Our members pledge their full support and cooperation for the turnaround strategies tabled by the company, but the very least they expect in return is the assurance that their salaries will be paid on time every time, said van Eeden.