DENEL says it cannot guarantee its workers a future at the state arms manufacturing company because of its worsening cash-flow problems.
The company has however assured the workers that it will pay the balance of their June salaries in about a week’s time.
In an internal memorandum leaked to the media, the company says employees will only receive 85% of their salaries on Tuesday.
Liquidity challenges at DENEL started in September last year when senior management only received 80% of their salaries.
DENEL Group Chief Executive Officer Daniel du Toit says:
“We have quite a challenging liquidity crisis, most months over the last six months since I came on board we have finalised salary payments in the last days up to the 25th of the month. In this month unfortunately we could not secure all the funding we need, I think we will have it in the next 2-3 days so in principle we can pay full salaries but it will be late and we thought it’s better to communicate it with the staff.”
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