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The bonds of state-owned arms company Denel were suspended from the JSE on Wednesday over its failure to submit its annual results for the 2021 financial year.
This breaches the JSE's debt listing requirements, which stipulate that state-owned companies must submit their annual statements within seven months of the financial year-end.
At the end of October 2021, Denel announced that its board had decided to defer the publication of annual financial statements and that it would be combined with the publication of the 2022 financial information. That led to the JSE announcing in early November that it was considering the suspension of Denel's listing of debt securities.
The beleaguered Denel has been battling with financial issues and allegations of corruption over several years. It has also struggled to pay staff salaries due to its financial woes. In August 2019, National Treasury granted Denel a R1.8 billion recapitalisation lifeline. It allocated R576 million for the 2020/21 fiscal year.
The Department of Public Enterprises said Denel had been unable to produce its annual financial statements due to uncertain going concern status "as efforts to recapitalise the business remain fruitless.
"The MTBPS 2021 provided funding to settle Denel guaranteed debt, which includes JSE listed bonds," it said.
But it added that "therefore, there should not be any fears regarding Denel’s ability to meet its long term debt obligations".
"The challenge for Denel is in securing funding for its restructuring, restarting of operations, and meeting its short term obligations including salaries. The DPE together with Denel Board are busy with the development of a financial solution," the DPE said.
Questionable dealings at Denel are highlighted in the second part of the State Capture commission report released on Tuesday. The commission report points out that Denel was once "highly regarded internationally" but is now "almost on its knees".
The commission concluded that the Gupta brothers and their associate Salim Essa used VR Laser Services, a supplier of armour plate and steel for the defence industry, as a "vehicle" to capture Denel.
