Latest news with #TongaatHulett
IOL News
14-05-2025
- Business
- IOL News
Tongaat Hulett's business rescue: Vision Consortium secures funding for lenders
Hippo Valley and Triangle Sugar are Tongaat Hulett units that supply Zimbabwe and the EU with sugar. Tongaat Hulett's Business Rescue Practitioners (BRPs) said they had received confirmation from the lenders, most South African banks, that they had received the balance of the funds owed to them by the Vision Consortium, the company that is taking over the struggling Southern African sugar group. This follows the Vision Parties confirming to the BRPs in April 2025 that they had secured credit approval to meet the payments of the balance of their obligations owed to the Lender Group, to enable the Vision parties to complete the acquisition of the claims and security. 'This represents a significant step forward in the successful implementation of the BR Plan and reinforces the BRPs' confidence in its ongoing viability,' the BRPs said in a statement.
IOL News
11-05-2025
- Business
- IOL News
Tongaat Hulett's rescue or ruin? the damning quiet of a company in freefall
Tongaat Hulett refinery in KwaZulu-Natal. Image: Supplied It has now been more than two years since Tongaat Hulett, South Africa's 130-year-old sugar giant, entered business rescue. What was supposed to be a bold restructuring has instead devolved into a slow, painful erosion of shareholder rights, creditor value, and public confidence. As of today, 10 May 2025, the Vision consortium—heralded as the saviour of Tongaat—has failed to deliver even a cent of the promised funding. The April 30 deadline, the fifth to be missed, has passed with silence. No explanation. No accountability. No money. And yet, somehow, the show goes on. The Illusion of Progress On 16 April, a SENS announcement confirmed that the Zimbabwean competition commission had approved the sale of assets to Vision. According to the Business Rescue Practitioners (BRPs), this was the 'last required competition authority sign-off,' supposedly marking progress. But let's call this what it really is: window dressing. The BRPs and Vision are pushing forward with asset sales not as part of a thriving business rescue, but as a fallback mechanism—the 'Debt Set Off' clause—that bypasses shareholder approval, strips the company of assets, and readies it for liquidation. Let that sink in: the rescue of Tongaat is being implemented through liquidation-by-stealth. Legal storms brewing This brazen shift has not gone unchallenged. Two legal processes are now before the courts: RGS Group's Part B in the Durban High Court seeks to set aside the adopted plan, citing Vision's failure to meet its contractual obligation to acquire the full R8.5 billion in lender claims before any debt-for-equity conversion or asset sale could proceed. That was a clear condition precedent—not a suggestion—and its violation renders the plan unimplementable under both the Companies Act and established precedent. A Shareholder Interdict submitted in the Johannesburg High Court seeks a declaratory order that the plan unlawfully alters shareholder rights and, by failing to hold a shareholder vote as required under Section 152(3)(c), was never lawfully adopted. In effect, the sale of assets currently underway may well be void ab initio—illegal from the outset. Tongaat Hulett itself confirmed in its 4 April BR update that while Part A of RGS's challenge was dismissed on urgency grounds, Part B remains active, and shareholders have delivered their own affidavit, which should have been publicly posted on THL's website. If either legal action succeeds, Vision's grip on Tongaat could collapse overnight. The myth of shareholder consent Let us be clear: shareholders never voted for this outcome. Despite the BRPs' insistence that the business rescue plan did not "alter shareholder rights," the facts say otherwise. The plan proposed issuing 4.86 billion shares to Vision, diluting existing shareholders to just 2.7%. In real terms, the dilution destroyed shareholder value by over 97%—a fact confirmed in the shareholder court application. Under Section 152(3)(c) of the Companies Act, any such alteration requires shareholder approval. Yet the BRPs, led by Trevor Murgatroyd, Pieter van den Steen and Gerhard Albertyn, chose not to convene a vote. Worse still, when shareholders rejected the Section 41(3) resolution to approve the share issue in August 2024, the BRPs simply pivoted to the asset sale model without missing a beat. This isn't corporate rescue. It's corporate coup. Asset Stripping in Real Time SENS notices confirm that the BRPs have signed four major Business Sale Agreements: Tongaat's entire South African operations have been sold to Vision Sugar SA. Its Zimbabwean business , Triangle Sugar, is being handed over. Its Botswana stake has been transferred to ensure a controlling 50.1% interest. And in perhaps the most controversial deal, Mozambique's sugar operations —including Acucareira de Moçambique and Tongaat Hulett Açucar Lda—are being disposed of. Yet to date, shareholders have not seen the sale agreements. The applicants in the shareholder interdict explicitly state they are unaware whether these deals are subject to any suspensive conditions, or whether they've already been partially executed. So we must ask: who authorised the sale of billions in strategic assets without a lawfully adopted plan? And more urgently—what happens if the courts rule that the plan was invalid from the outset? The sound of silence Standard Bank, Vision's transaction advisor, guarantor and lead lender, remains disturbingly quiet. It was their 'letter of funds' in December 2023 that supposedly confirmed Vision's liquidity. Yet four deadlines have now passed. Did the funds ever exist? Were they warehoused elsewhere? Has Standard Bank misled the market? The same bank now stands to benefit from Vision's completion of the deal it enabled and guaranteed. If this isn't a case study in conflicted interests, then nothing is. What the law demands Sections 134, 140 and 152 of the Companies Act exist precisely to prevent this kind of abuse. They require: That all property disposals occur only under a lawfully adopted business rescue plan. That BRPs must implement only such a plan—not their own version. That shareholder rights, if altered, must be approved in a vote. All of these protections have been cast aside. In their place is a rescue plan implemented in name only—a plan that no longer exists in its originally approved form, but continues to be actioned as if it does. This Is No Longer Business Rescue Let's not sugarcoat it: Tongaat Hulett is being dismantled. And this is happening under the noses of regulators, bankers, employees, and the public. If the courts do not intervene—and fast—South Africa may soon witness one of its oldest listed companies being dismembered in broad daylight, shielded by legal technicalities and institutional apathy. The Verdict: The shareholders have spoken. The courts are being called. The facts are plain. Vision has not paid. The plan was not lawfully adopted. And Tongaat Hulett—along with its thousands of employees and legacy—deserves better than this. This isn't rescue. This is the slow-motion execution of a national asset. Roy Nzero is a small scale farmer in Jozini, KZN with a masters in agricultural science. ** The views expressed do not necessarily reflect the views of IOL or Independent Media. BUSINESS REPORT
IOL News
29-04-2025
- Business
- IOL News
Business Rescue puts Tongaat Hulett back on track
During this adversarial process the BRPs and Tongaat Hulett's senior leadership remain resolutely committed to implementing the Vision business rescue plan. Image: Supplied By Dave Howells Tongaat Hulett is unquestionably one of South Africa's most vital sugar producers. Tongaat Hulett continues to operate effectively and is firmly on the road to recovery in anticipation of the successful implementation of its business rescue plan. Business rescue is, by nature, a complex process that requires a careful balancing of competing interests while providing a lifeline to companies teetering on the brink of collapse. In the case of Tongaat Hulett, this lifeline has not only sustained the business and those who rely on it but also positioned the company to play a crucial role in securing the long-term sustainability of the sugar industry. This achievement is even more remarkable considering the company's dire situation just three years ago, when it lost R12 billion in value due to alleged accounting fraud committed by former senior executives. In consequence of the resultant financial distress occasioned by this alleged malfeasance, Tongaat Hulett entered business rescue in October 2022. The immensity of the challenge it then faced cannot be overstated: avoiding liquidation, stabilising operations, and, most importantly, protecting the thousands whose livelihood is and remains tied to its sugar and animal feed businesses. While civil and criminal proceedings against the former executives continue to progress slowly, we are pleased that the business rescue process is now nearing its conclusion. This is despite ongoing efforts by third parties to derail the process through vexatious and unsuccessful court challenges, which have cost money and diverted focus from the core objective: saving Tongaat Hulett's operations. The success achieved thus far is the result of collaboration between all stakeholders who are, and remain committed to developing and executing a viable business rescue plan that ensures long-term recovery. To this end, several potential Strategic Equity Partners were invited to participate in a bidding process. Following extensive engagement and multiple rounds of due diligence, the business rescue practitioners (BRPs) published two separate business rescue plans one from each of two consortiums, namely Vision Parties and RGS, in December 2023, for creditor consideration. However, late in the day before the scheduled meeting to vote on the two business rescue plans, RGS withdrew its proposed plan, leaving Vision's proposed plan as the only viable business rescue plan for creditors to consider. On 11 January 2024, Tongaat Hulett's creditors adopted and approved the Vision business rescue plan in terms of section 151 of the Companies Act 71 of 2008, with an overwhelming 98.5% of the vote in favour. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ This alternative option was also approved and adopted by the majority of creditors at the 11 January 2024 meeting referred to above. This remains a core element of the Vision business rescue plan and is being carried out with confidence and in strict accordance with due process. A critical part of the rescue effort has been securing funding to maintain operations. Thanks to substantial post-commencement support from the Industrial Development Corporation (IDC), Tongaat Hulett has successfully continued to run its mills in Maidstone, Amatikulu, and Felixton, as well as its refinery and animal feeds facilities. This has enabled continued employment, stable cane procurement from growers, and consistent production. Over the past three years, Tongaat Hulett has allocated R1.425bn to essential off-crop maintenance, ensuring the reliability and efficiency of its sugar operations. In the 2024/2025 season alone, R460 million has been spent during the off-season to prepare the mills and refinery to receive cane when harvesting begins in a few weeks. One of the more difficult, but necessary, decisions made during the rescue process was the temporary suspension of payments to the South African Sugar Association (SASA), in line with Section 136 of the Companies Act 71 of 2008. This decision was taken to preserve cash flow at a critical juncture and support the business's long-term survival. To obtain legal clarity on whether charges imposed by (SASA) such as levies under the Sugar Industry Agreement may be suspended during business rescue, the BRPs approached the KwaZulu-Natal High Court for a declarator in this regard. The Court ruled that such charges may not be suspended, a decision the BRPs believe carries serious implications for future business rescue efforts across South Africa and for Tongaat Hulett. Tongaat Hulett and the BRPs have appealed to the Supreme Court of Appeal (SCA) to seek clarification on the proper interpretation of Section 136(2)(a)(ii) of the Companies Act. While the appeal is pending, it is required that the disputed funds will be placed in escrow in accordance with the approved plan. Currently, the business is well-positioned to continue its transition toward a stable and sustainable future under the eventual ownership of Vision. Once Tongaat's business is transferred to Vision in terms of the business rescue plan, we are confident that the turnaround and strategic repositioning of Tongaat Hulett's business will continue to ensure that Tongaat Hulett remains a vital economic contributor in KwaZulu-Natal and across South Africa. Dave Howells is Managing Director of Tongaat Hulett Limited's South African Sugar business. Image: Supplied * Dave Howells is Managing Director of Tongaat Hulett Limited's South African Sugar business. ** The views expressed do not necessarily reflect the views of IOL or Independent Media. BUSINESS REPORT
