The anticipated expenditure outcome for 2005/06 of R419-billion took into account unforeseeable and unavoidable expenditure of R2-billion to the state arms company Denel Corporation, and R2,7-billion to the Road Accident Fund, reported South African Finance Minister Trevor Manuel.
The capital investment in Denel had been made ”to enable it to proceed with the restructuring necessary to achieve solvency and profitability”.
The payment made to the Road Accident Fund contributed to addressing its backlog in claim settlements, he said.
Meanwhile, Denel chief executive officer Shaun Liebenberg noted the reference by the finance minister to Denel and said it was the ”first phase of the recapitalisation of Denel”.
”I wish to thank the government for its firm support,” he said.
It was clear that government was committed to Denel’s objective to get on an even keel in a phased approach towards returning South Africa’s aerospace and defence asset to sustainable profitability, he said.
”I’m particularly pleased the National Treasury has afforded Denel an opportunity over the past months to outline the company’s macro strategy. In extensive briefings to our other stakeholders, notably the parliamentary portfolio committees on Public Enterprises and Defence, I’ve received full support.”
”We still have a long road ahead to complete the roll-out of the strategy, yet I’m confident the appropriation will carry us through the first phase of Denel’s restructuring, notably exiting the non-profitable businesses, attracting equity partnerships and building world-class capacity.” – I-Net Bridge