{"id":8444,"date":"2012-02-29T14:43:26","date_gmt":"2012-02-29T12:43:26","guid":{"rendered":"http:\/\/www.myza.co.za\/02\/text-fitchdenels-zar700m-recap-is-a-step-in-the-right-direction\/"},"modified":"2012-02-29T14:43:26","modified_gmt":"2012-02-29T12:43:26","slug":"text-fitchdenels-zar700m-recap-is-a-step-in-the-right-direction","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/text-fitchdenels-zar700m-recap-is-a-step-in-the-right-direction\/","title":{"rendered":"TEXT-Fitch:Denel&#8217;s ZAR700m recap is a step in the right direction"},"content":{"rendered":"<p>\t\t<span><\/span><\/p>\n<p>(The following statement was released by the rating agency)<span><\/span><\/p>\n<p><span><\/span><\/p>\n<p>Feb 29 &#8211; Fitch Ratings says that the ZAR700m allocated by the South African National<br \/>\nTreasury to recapitalise Denel indicates that the government continues to support Denel (SOC)<br \/>\nLtd&#8217;s (Denel; &#8216;AA(zaf)&#8217;\/Negative\/&#8217;F1+(zaf)&#8217;) turnaround strategy. Fitch believes the equity<br \/>\ninjection is a step in the right direction for Denel&#8217;s strategic long-term plan to be<br \/>\nfinancially self sustainable.<\/p>\n<p><span><\/span><\/p>\n<p>&#8220;Fitch has always factored state support into Denel&#8217;s ratings but the form and<br \/>\ntiming of the recapitalisation remain somewhat unclear,&#8221; says Karabo Matentji,<br \/>\nAssociate Director in Fitch&#8217;s Corporate team. &#8220;The existing short-term debt<br \/>\nguarantees of ZAR1.85bn are likely to remain in place and continued visible<br \/>\nsupport from the government could result in a potential stabilisation of the<br \/>\nrating Outlook.&#8221; Fitch recognises that Denel is currently in discussion with the<br \/>\nshareholder regarding the timing and detail of the ZAR700m recapitalisation.<\/p>\n<p><span><\/span><\/p>\n<p>In February, South Africa&#8217;s Finance Minister announced in the 2012 budget speech<br \/>\nthat ZAR700m had been allocated to fund Denel&#8217;s subsidiary, Denel Saab<br \/>\nAerostructures. The Denel Saab Aerostructures business reported an operating<br \/>\nloss of ZAR223m in FY11 compared with the operating loss of ZAR283m in FY10.<\/p>\n<p><span><\/span><\/p>\n<p>Denel remains a strategic asset for the Republic of South Africa, given its<br \/>\nstatus as a wholly state-owned company and as a strategic defence supplier to<br \/>\nkey South African security forces. As such, the ratings incorporate Fitch&#8217;s<br \/>\ntop-down assessment of the company in relation to South Africa&#8217;s sovereign<br \/>\nratings (foreign currency Long-Term IDR &#8216;BBB+&#8217;\/Negative, local currency<br \/>\nLong-Term IDR &#8216;A&#8217;\/Negative).<\/p>\n<p><span><\/span><\/p>\n<p>Denel operates in the aerospace and defence industry. Its business activities<br \/>\ninclude engineering, manufacturing, research and development.<\/p>\n<p><span><\/span><\/p>\n<p class=\"copyright\">\n<p>         \t\t\u00a9 Thomson Reuters 2012 All rights reserved<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(The following statement was released by the rating agency) Feb 29 &#8211; Fitch Ratings says that the ZAR700m allocated by the South African National Treasury to recapitalise Denel indicates that the government continues to support Denel (SOC) Ltd&#8217;s (Denel; &#8216;AA(zaf)&#8217;\/Negative\/&#8217;F1+(zaf)&#8217;) turnaround strategy. Fitch believes the equity injection is a step in the right direction for [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-8444","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/8444","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=8444"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/8444\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=8444"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=8444"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=8444"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}