Photo for illustration. (Photo: Tongaat Hulett / Webtuiste).
The struggling sugar company Tongaat Hulett received a bailout of R200 million at the eleventh hour on Thursday.
This decision was made public when the High Court in Durban was informed that an agreement had been reached between the business rescue practitioners of Tongaat Hulett, the Industrial Development Corporation (IND) and the Vision consortium.
Tongaat Hulett’s application for provisional liquidation was supposed to be heard by the court on Thursday and Friday. Thanks to the bailout, the application has now been provisionally postponed until June, said Janke Tolmay, a media liaison officer of Tongaat Hulett.
She added that the bailout enables Tongaat to continue to conduct business until the application is concluded.
Tongaat Hulett has been in business rescue since October 2022, but has remained in operation. Earlier this year, however, the business rescue practitioners applied for provisional liquidation after a sale agreement with the Vision consortium lapsed.
Several role players oppose the provisional liquidation. These include the SA Sugarcane Growers’ Association, which represents almost 30 000 producers, the NOK which made more than R2.3 billion available during the process, and Parks Tau, the Minister of Trade, Industry and Competition.
The Sugarcane Growers’ Association says that if the company is put into unfunded liquidation, major beverage and snack manufacturers could be forced to rely exclusively on imported white sugar. This will further expose the local economy to the volatility of world sugar prices and seriously threaten the sustainability of the local industry.
If liquidation does become unavoidable, the association believes that a funded liquidation must be negotiated to ensure that the mill remains in operation and does not fall into disuse.
The South African Farmers’ Development Association welcomed Thursday’s postponement.
“The postponement makes it possible for a long-term solution to be found and we are grateful for the much-needed lifeline that has been granted,” says the association in a statement.
