Tongaat Hulett clings to life as rescue drags into third year
Tongaat Hulett has been in business rescue for three years.
Image: Supplied
Tongaat Hulett’s business rescue practitioners have again said they believe the sugar producer can still be rescued.
This is almost word-for-word the same message shared a month ago.
In their latest update, released on Thursday, the business rescue practitioners (BRPs) said they continue to “advance the necessary steps to implement the Amended Business Rescue Plan,” which was approved by the required majority of creditors at the end of January 2024.
That still leaves creditors in the dark as to when the mess will be resolved.
They added that the business rescue plan for Tongaat Hulett Developments Proprietary Limited, approved on May 30, 2023, “continues to be implemented”.
“It remains our view that the company stands a reasonable chance of being rescued,” said the report.
These are the same phrases used a month ago, which marked three years almost to the date that Tongaat Hulett went into business rescue.
The company was founded in the 1950s and listed on the JSE in 1952.
The implementation of this plan has faced several challenges, including missed funding deadlines.
Tongaat Hulett and its property arm voluntarily entered business rescue in South Africa on October 27, 2022.
This came after the board found the companies were in “financial distress” due to a working capital shortfall of about R1.5 billion.
The crisis followed years of high debt, alleged accounting irregularities, and poor management, worsened by the COVID-19 pandemic and the KwaZulu-Natal unrest in 2021.
A group of banks had also refused to extend more credit.
Tongaat Hulett operates four sugar mills in South Africa, on the KwaZulu-Natal north coast and in Zululand.
Its sugar operations in Botswana, Mozambique, and Zimbabwe continue to trade normally.
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