South Africa’s state defence firm Denel struggling to pay wages

JOHANNESBURG (Reuters) – South Africa’s state-owned defence group will only pay employees 85 percent of their salaries this month because of liquidity problems, a memo to staff seen by Reuters showed on Tuesday.

The cut to wages highlights the severity of the financial crisis at Denel, which makes ammunition, missiles and armoured vehicles for the South African armed forces and customers in Africa, the Gulf and Europe.

The company has been working on a turnaround plan with the government, but it has so far failed to secure the significant cash injection it wanted.

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