He offered the rescue deal to the creditors of SunSpace on Monday (July 15) to secure the company's intellectual property and tangible assets. The company has been in limbo for two years after Cabinet announced in 2010 that the state should buy a stake in the struggling company.
The rescue deal now paves the way for the incorporation of SunSpace into Denel Dynamics and secures the jobs of 80% of the staff, which agreed to move with the company to Denel.
Denel Dynamics executive Tsepo Monaheng said they were proud to be associated with the Department of Science and Technology's flagship programme as they have been "exploring opportunities in satellite and space engineering" in conjunction with the South African National Space Agency (Sansa) and the department since 2011.
Denel was involved in previous space programmes until 1996 and has a latent space capability, including key staff who still work for Denel on various programmes, as well as for Houwteq satellite test facility near Grabouw.
The department entered into an agreement with Denel Dynamics to house SunSpace. The department's decision was based on a recommendation in a business rescue plan compiled by a practitioner appointed by the SunSpace board.
According to the department, the core capability of the satellite manufacturing unit of SunSpace is worth saving because it will be used to develop and broaden a competitive satellite manufacturing industry in SA for Africa.
"The capability will be developed to serve the satellite development needs of the country and the rest of Africa, as well as other regions of the world," Hanekom said.
He welcomed the absorption of SunSpace's core capability into Denel, adding that he expected the absorption process would be completed by the end of this year.
Hanekom welcomed the decision by the majority of SunSpace's creditors to accept the department's offer of R55m for the institution's intellectual property and tangible assets.
It is also in line with a Cabinet decision that the company be absorbed into Sansa.
As part of a process of absorbing SunSpace's capability within Denel, the company's employees have been offered employment in the new business unit and most of them (more than 80%) have accepted the offer thus ensuring that key capabilities are retained. "In this way, SA will retain the critical homegrown capacity developed by SunSpace," the department said.
Monaheng said this opportunity would allow Denel to optimise the synergy between the SunSpace capabilities and the latent capability in Denel for the broader national technological benefit.
"We will ensure that SA will not only retain the critical homegrown capacity developed by SunSpace, but strengthen and grow this base by using Denel Dynamics' engineering skills development programme," he said.
Source: Business Day via I-Net Bridge
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