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09 NOVEMBRE 2018

13:17 - Sud Africa

SAUDI ARABIA MAKES $1BN BID FOR PARTNERSHIP WITH DEFENCE GROUP DENEL

(ICE) - ROMA, 09 NOV - Saudi Arabia has made a $1-billion bid for a broad partnership with South African State-owned defence group Denel that would include the acquisition of a minority stake in a joint venture with Germany's Rheinmetall. Currently heavily dependent on imports, Saudi Arabia, the world's third-largest defence spender, is seeking partnerships to develop its own domestic defence industry with the goal of localising half of its military spending by 2030. Saudi Arabian Military Industries (Sami), the kingdom's State defence company, told Reuters last month that it was in discussions with all major South African firms and aimed to conclude the first deals by the end of this year. Saudi Arabia is said to be targeting Denel's 49% stake in Rheinmetall Denel Munition (RDM). RDM is a South African-based joint venture formed in 2008 between Denel and Rheinmetall Waffe Munition, which holds the remaining 51% stake. It specialises in the development, design and manufacture of medium and large-calibre ammunition including artillery shells. Under the Saudi offer, Sami would also finance research and development in other Denel divisions including Denel Dynamics, which develops and produces tactical missiles and precision guided weapons. Denel and Sami would share intellectual property and under a new joint venture would target defence export markets in the Middle East and North Africa. Finally, Saudi Arabia - already a top Denel customer for military vehicles, artillery munitions and radar equipment - would purchase a certain amount of the group's production. The Saudis expect an answer from the South African authorities by the end of December. Denel is grappling with an acute liquidity crunch and is struggling to pay salaries and deliver on roughly R18-billion ($1.29-billion) of outstanding orders. Following seven years of modest profits, the company said last week it had made an operating loss of R1.7-billion in the 2017/18 financial year. Sector observers say finding an equity partner is essential to Denel's survival. (Engineering News - Reuters) (ICE JOHANNESBURG)

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