Online Reporter
Business Reporter
TROUBLED South African sugar and agri-processing group Tongaat Hulett, which also owns Hippo Valley and Triangle Limited in Zimbabwe, might be placed under provisional liquidation after a rescue plan collapsed, administrators confirmed on Thursday.
The 134-year-old company, which was placed into business rescue in October 2022, saw its last remaining hope of survival extinguished when prospective acquirer Vision declined to extend lapsed sale agreements.
Business rescue practitioners have now applied to court to wind up the company, concluding there is “no longer a reasonable prospect of rescuing” the business.
The development places thousands of jobs at risk and leaves growers, suppliers and creditors facing substantial losses.
Tongaat Hulett is one of South Africa’s largest sugar producers and a major employer in KwaZulu-Natal.
A business rescue plan approved by creditors in January 2024 had hinged on Vision acquiring the company’s operating assets and certain regional investments.
The plan offered two routes: a debt-to-equity conversion or, failing that, an asset sale.
Shareholders rejected the debt-to-equity proposal, triggering the alternative asset sale transaction.
However, Vision was unwilling to grant further extensions after conditions attached to the sale agreements were not met.
Those conditions included refinancing a R23 billion post-commencement funding facility from the Industrial Development Corporation, funding a R517 million escrow account for the South African Sugar Association pending litigation and providing R75 million for distribution to concurrent creditors.
The company’s collapse follows years of financial turmoil.
Tongaat Hulett was forced to restate several years of financial results in 2019 following an accounting scandal, and had been struggling under a heavy debt burden before ultimately entering business rescue.
In a notice to affected persons published on the Johannesburg Stock Exchange (JSE)’s Sens platform, the business rescue practitioners and management acknowledged “the uncertainty that this development creates for employees, growers, suppliers, customers, creditors and affected communities”.
They expressed appreciation for “the resilience and support demonstrated during this challenging period”.
Further communication is expected as next steps are assessed in accordance with the Companies Act.
Tongaat Hulett’s shares were suspended from trading on the JSE upon its entry into business rescue in 2022.
The company’s operations include sugar production, starch manufacturing and property development interests across Southern Africa.
Tinaye Agere