South Africa’s state-owned defense firm Denel made a $129.8 million loss in the 2019/20 financial year compared to a $98.2 million loss in the previous year.
Denel manufactures military equipment for South Africa’s armed forces, and has been embroiled in a financial crisis made worse by the ongoing coronavirus pandemic.
In October, Denel requested for a $231 million bail out from the National Treasury spread out over the next three years.
The firm struggled to pay salaries of its staff; and a lack of exports in the financial year slashed its revenues by over two thirds.
In November, the government eased the terms of a $37 million bailout it received for the financial year that ends in March 2021.
The Ministry of Finance had allocated the bailout to pay off guaranteed debt, but Denel requested for permission to use the outstanding $13 million to support activities that they say would generate revenues.
“The Minister of Finance indeed waived the conditions and allowed Denel to use the funds for any purpose apart from paying off guaranteed debt,” said Kgathatso Tlhakudi, director-general of the Department of Public Enterprises (DPE).