Denel con­firms Saudi talks

The Citizen (KZN) - - NEWS - Simnikiwe Hlat­sha­neni

State arms util­ity Denel has con­firmed South Africa was in talks with its mid­dle-eastern coun­ter­part, Saudi Ara­bian Mil­i­tary In­dus­tries (SAMI), about an arms deal which would see the paras­tatal mak­ing and sell­ing weapons to Saudi Ara­bia.

Satur­day Cit­i­zen had asked Denel to con­firm a Reuters re­port that Saudi Ara­bia made a R14 bil­lion bid for a part­ner­ship with Denel that would in­clude the acquisition of a mi­nor­ity stake in a joint ven­ture with Rhein­metall Denel Mu­ni­tion.

“I am not in a po­si­tion to an­swer to de­tails on any spe­cific coun­try or com­pany in­ter­est to in­vest in Denel,” said Denel’s head of com­mu­ni­ca­tions Pam Malinda.

“How­ever, as part of the ef­forts to re­po­si­tion the com­pany and find a sus­tain­able fund­ing model, some of the op­tions Denel is dis­cussing [sub­ject to board and share­holder ap­proval] in­clude the con­sid­er­a­tion of ex­it­ing non­core ca­pa­bil­ity ar­eas, re­struc­tur­ing the cost base, ex­plor­ing part­ner­ships on core non­vi­able busi­nesses and to drive a strong ex­port ori­en­ta­tion through strate­gic equity part­ners and joint ven­tures. These are all still only at in­ter­nal dis­cus­sion and ex­plo­ration stage.”

Denel said it was aware that var­i­ous gov­ern­ment in­sti­tu­tions con­firmed dis­cus­sions had taken place be­tween SAMI and var­i­ous or­gans of state in South Africa.

How­ever, Malinda ar­gued that since Denel was a state en­tity un­der the de­part­ment of pub­lic en­ter­prises (DPE), such a deal had to be pur­sued by SAMI on a stateto-state ba­sis. “The South African gov­ern­ment’s reg­u­la­tory frame­work dic­tates this ap­proach to these kinds of over­tures.

“Denel’s re­sponse would then be guided by its board, the DPE and pos­si­bly Na­tional Trea­sury among rel­e­vant in­sti­tu­tions.”

Denel’s last at­tempt to en­ter the multi­bil­lion-rand Asian arms race was thwarted when it was re­vealed that Denel Asia, the would-be joint ven­ture be­tween the util­ity and VR-Laser Asia was wrought with links to the con­tro­ver­sial Gupta fam­ily. The event cost the state R400 mil­lion.

The dis­cus­sions with Saudi Ara­bia have been met with crit­i­cism by some who pointed out that the mid­dle-eastern monar­chy was linked to hu­man rights atroc­i­ties, such as its on­go­ing and deadly oc­cu­pancy in the neigh­bour­ing Ye­men, as well as the re­cent death of Saudi jour­nal­ist Ja­mal Khashoggi.

Denel’s re­sponse would then be guided by its board, the DPE and pos­si­bly Na­tional Trea­sury. Pam Malinda Denel head of com­mu­ni­ca­tions

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