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Sugar producer Tongaat Hulett last Friday rejected concerns raised by Barloworld over the profitability of its starch business, which Barloworld is in the process of buying for R5,3 billion.
Tongaat’s chairperson Louis von Zeuner, in a special general meeting maintained the business was profitable despite concerns about the impact of the Covid-19 pandemic on operations. Last year, the KwaZulu-Natal-based firm was embroiled in a financial scandal that showed accounting irregularities resulting in inflated profits.
Its shares plummeted and were subsequently suspended from the JSE for a period of seven months.
Since returning to the market, the company’s stock price has fallen more than 65 percent and, due to heightened debt levels that are above its market capitalisation, it has had to sell non-core assets.
According to Nolwandle Mthombeni, an investment analyst at Mergence Investment Managers,, the sale of the business would help Tongaat to plug its debt hole. — fin24.com
Online Reporter