JOHANNESBURG – Members of South African trade union Solidarity at struggling state-owned arms firm Denel have rejected a proposal to cut their salaries by around 20 percent from the end of November, the union said on Monday.
Denel is battling to stay afloat after reporting a 1.7 billion rand ($118 million) loss for the 2017/18 financial year.
The company, which makes weapons, missiles and armoured vehicles for the South African armed forces and clients in Africa, the Gulf and Europe, was late paying managers and specialists their full salaries earlier this year because of a lack of liquidity.
Solidarity, which represents around a quarter of Denel’s workforce of 4,000 people, said in a statement that selling equity in Denel was the only way to save the company.
Saudi Arabia recently approached South Africa about taking a stake in, or inking partnership deals with, Denel.
Denel did not immediately respond to a request for comment.
The company is one of a handful of state firms that became embroiled in corruption scandals involving the Guptas, a trio of brothers with close ties to former South African president Jacob Zuma.
Zuma and the Guptas deny wrongdoing. Their relationship forms part of the focus of a government graft inquiry backed by new President Cyril Ramaphosa.
Ramaphosa said last week that Denel was “ripe” for joint venture partnerships but the government would want to retain control if any stake sale went ahead.