July 20, 2020 / 1:28 PM / 21 days ago

UPDATE 1-CEO of S.African state defence firm Denel to step down

(Adds detail, context)

JOHANNESBURG, July 20 (Reuters) - The chief executive of South Africa’s beleaguered state-owned defence firm Denel will step down on Aug. 15, the company said on Monday.

Denel, which makes equipment ranging from armoured vehicles to attack helicopters and missiles, has struggled to pay employee salaries amid a liquidity crisis aggravated by the COVID-19 pandemic.

The company did not say why CEO Danie du Toit was resigning and he declined to comment when contacted by Reuters.

In its statement, Denel said an interim CEO would be appointed shortly.

One of several state firms being kept afloat with government bailouts, Denel received 1.8 billion rand ($108 million) from the state last year.

It was promised another 576 million rand in this year’s budget, but those funds are earmarked to help clear debt and so far only 72 million rand has been disbursed.

In an interview with Reuters earlier this month, du Toit said Denel may not survive the next few months unless the government lets it use some promised bailout funds to generate revenues rather than to repay debt.

$1 = 16.7313 rand Reporting by Joe Bavier and Alexander Winning; Editing by Mark Potter

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