Business
Tongaat Hulett’s Sweet Comeback: Business Rescue Spurs Hope for Sugar Giant’s Future
Once on the brink of collapse, Tongaat Hulett — one of South Africa’s most crucial sugar producers — is now firmly on the road to recovery thanks to a comprehensive business rescue plan backed by stakeholders, creditors, and the Industrial Development Corporation (IDC).
The sugar giant entered business rescue in October 2022 following a catastrophic loss of R12 billion, the result of alleged accounting fraud by former executives. What followed was a highly complex and contested rescue effort aimed at protecting thousands of jobs and preserving the company’s key role in the agricultural value chain.
Today, the results are showing.
With operations stabilised and mills running efficiently in Maidstone, Amatikulu, and Felixton — along with its refinery and animal feed plants — Tongaat Hulett has not only survived but is laying the groundwork for a sustainable future.
“The success achieved thus far is the result of intense collaboration between all stakeholders,” say the Business Rescue Practitioners (BRPs), who have overseen the turnaround effort.
In January 2024, creditors overwhelmingly approved the business rescue plan proposed by the Vision consortium. With 98.5% voting in favour, it was clear that stakeholders saw a viable path forward. This plan includes the eventual transfer of Tongaat’s business operations to Vision, bringing new ownership and long-term strategic direction.
A key part of the recovery has been financial support. The IDC’s post-commencement funding played a pivotal role in keeping operations afloat, allowing the company to invest R1.425 billion in essential off-crop maintenance over three years — including R460 million for the current 2024/2025 season.
The plan hasn’t been without challenges. Court disputes over levies owed to the South African Sugar Association (SASA) have added complexity. While the KwaZulu-Natal High Court ruled these levies cannot be suspended during business rescue, the BRPs have appealed the decision, seeking legal clarity on Section 136 of the Companies Act.
In the meantime, disputed payments will be held in escrow until the matter is resolved.
“We are confident that the turnaround and strategic repositioning of Tongaat Hulett’s business will ensure it remains a vital economic contributor in KwaZulu-Natal and across South Africa,” the BRPs added.
As harvesting season approaches, Tongaat Hulett looks to a future where it can once again thrive — not just as a company, but as a cornerstone of South Africa’s sugar industry.
{Source: IOL}
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