daniel chigunwe
Nelson Gahadza
Tongaat Hulett’s creditors have agreed to extend the deadline by which to determine the approval of the business rescue plan until the end of September to allow for further information.
The first business rescue plan was presented at the end of May, with significant hopes for the future of the company put on the success of a full or partial sale.
However, the postponement of the amended business rescue plan will not have an impact on Zimbabwe operations.
Tongaat wholly owns Triangle Sugar Corporation (Pvt) Ltd, a duly registered Zimbabwean entity, which owns Hippo Valley Estates and Triangle Ltd.
Hippo Valley Estates chief executive, Aiden Mhere, in an update on the Business Rescue process, said the postponement will ensure that the Company will all have additional information on the business rescue plan.
“The Zimbabwean operations, that is, Hippo Valley Estates Ltd and Triangle Ltd, are not under business rescue and are therefore not directly impacted by the business rescue process of THL in South Africa.
“Further updates will be provided as the process unfolds,” he said.
Mhere said on Friday, June 9, 2023, a notice was issued to affected persons to advise that the Business Rescue Practitioners (BRPs) are seeking to extend the voting on the Business Rescue Plan from the last stated date of June 15, 2023, to no later than September 30, 2023.
He said, as they have communicated before, the BRPs wanted to publish a rescue plan that contained details relating to the outcomes of specific transactions.
“Since the release of the business rescue plan, the BRPs and the management team in South Africa have continued with discussions with a range of parties.
“The BRPs reached an agreement with relevant stakeholders on Friday, June 9, 2023, that updating the business rescue plan with additional details in terms of the strategic equity partner process and other matters would be in the best interest of creditors before they are requested to vote.
“This will ensure that the company will all have additional information on the Business Rescue Plan,” said Mhere.
Mhere noted that the amended plan will ensure the operational aspects of the business continue, and creditors will only vote on the plan in September 2023.
He said engagement with the eight potential Strategic Equity Partners (SEPs) interested in the acquisition of, or investment in, the whole of THL and/or the SA Sugar businesses and/or parts thereof will continue.
“The same work streams as set out in the originally published Business Rescue Plan take place. Only the timing of events changes, with the sourcing of a strategic equity partner pre-dating the release of the revised Business Rescue Plan,” said Mhere.
He noted that operational and corporate restructuring will commence after the plan is signed off and there is clarity on the outcome of the SEP process.
Tongaat recently said Zimbabwe’s sugar operations are financially sound and will continue trading in the ordinary course of business.
The group said the operations remain self-funded, operational, and subject to the usual high level of sound corporate governance principles, policies and procedures.
Hippo Valley in its latest trading update said sugar production for the upcoming 2023/24 season is forecast to be marginally above levels achieved during the prior season.
The company indicated the impact of current cane expansion and yield improvement initiatives will crystalise in future seasons due to the long cropping cycle for sugarcane.
The group noted that current marketing focus remains on optimising returns, specifically through prioritising local market requirements and allocating residual stocks to regional and premium international markets to generate additional foreign currency.
Bongani Ndlovu