Public Enterprises Minister Pravin Gordhan has announced a new Interim Board of Directors for the struggling state-owned entity, Denel.
This makes Denel the third State Owned Enterprise to receive a major board overhaul.
Acting DG at Department of Public Enterprises, Makgola Makololo says Denel's been faced with a number of challenges.
They also have a huge market globally, but their ability to service those contracts to ensure that they can deliver on time has been a major challenge. That has been the serious driver of the liquidity issues that they are currently facing.— Makgola Makololo, Acting DG at Department of Public Enterprises
Makololo says Denel depends heavily on the Defence Force in terms of the marketing of their product, and claims it's failing to convert its order books into revenue.
But more than that, banks began losing confidence in the enterprise after the board made several bad business decisions.
The banks have taken a certain posture on Denel towards the end of last year. They felt they were seriously exposed to issues of corruption and particular individuals on the board and said they wouyld not be in position to continue lending to Denel until they are clear their money is being used for the right things.— Makgola Makololo, Acting DG at Department of Public Enterprises
Makololo says Denel is still facing serious financial difficulties with debts owning of R350-million.
Staff and suppliers haven't been paid for over 200 days.
Minister Gordhan announced the new Chairperson as Monhla Hlala. She is the former CEO of Acsa.
Other board members former chairman of Saab Grintex, Zoli Kunene, business woman Gloria Serobe, and struggle activist Cheryl Carolus.
The new board began work on April 1.
To hear the rest of the conversion with Makgola Makololo, listen below:
This article first appeared on CapeTalk : Gordhan appoints new board members to rescue cash-strapped Denel