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The process to provisionally liquidate Tongaat Hulett Limited was launched on 12 February, causing significant concern and turmoil in the sugar and animal feed industry (notably Voermol Feeds) which depends on molasses for some of its products. Dr Thomas Funke, chief executive officer of the South African Cane Growers Association (SA Canegrowers) described the matter as “extremely concerning”.
During a South African Sugar Association (SASA) media tour held a day after the announcement of Tongaat Hulett’s liquidation application, Dr Funke told Plaas Media that the process could be especially harmful if it is not conducted in a controlled and funded manner. “What we need is for mills to remain open and accept sugarcane in the coming season. Thousands of small-scale and commercial producers, as well as farm workers, depend on Tongaat Hulett to crush sugarcane and supply it to the South African market.”
Dr Funke added that the additional burden of cheap sugar imports is certainly not helping the situation. SASA has been pleading with government to intervene with regard to these imports for some time now, as the livelihoods of many depend on sustainable sugarcane production and processing in the country.
Business rescue plan
Tongaat Hulett was placed under business rescue on 27 October 2022. A business rescue plan, proposed by the Vision consortium, was approved and accepted by most creditors, including the historic loan group, on 11 January 2024. This loan group comprises a consortium of banks and financial institutions that lent money to Tongaat Hulett.
The adopted business rescue plan was based on Vision acquiring the loan group’s claims and/or a debt-for-equity swap, or, if that failed, an asset sale. However, shareholders did not support the debt-for-equity transaction. As a result, the plan required the implementation of transactions involving the conclusion and execution of certain sales agreements. Under these agreements, Vision would acquire Tongaat Hulett’s operating assets, along with its investments in Zimbabwe, Mozambique and Botswana, and assume responsibility for funding and stabilising the business.
Strict requirements
Certain non-negotiable conditions were attached to the business rescue plan, which also formed part of the Vision sale transaction. According to various sources these conditions included the refinancing of the former Industrial Development Corporation’s (IDC) post-commencement funding facility of R2,3 billion; the funding of a holding (escrow) account amounting to R517 million in respect of SASA, pending the outcome of legal proceedings; and making R75 million available for distribution to creditors.
On 7 February 2026, however, the sales agreement expired after Vision refused to grant an unconditional extension. As a result, the business rescue plan can no longer be implemented. Accordingly, the business rescue practitioners, in terms of section 141.2(a) of the Companies Act. 2008 (Act 71 of 2008), concluded that there is no longer a reasonable prospect of rescue.
Consequently, on 12 February 2026, they submitted a court application for the provisional liquidation of Tongaat Hulett. In their statement, the business rescue practitioners and Tongaat Hulett’s management acknowledged the significant uncertainty this development creates for the company’s workers, producers, suppliers, customers, creditors and the communities involved. They also expressed appreciation for the resilience and commitment shown by stakeholders during this challenging period. – Izak Hofmeyr and Susan Marais, Plaas Media
A copy of the application to the court for the provisional liquidation of the company is available on Tongaat Hulett Limited’s website at https://www.tongaat.com/business-rescue/ Affected parties are reminded that all notices and documents regarding the business rescue proceedings of the company which have been and/or will be distributed to all known affected persons will be published and made available on Tongaat Hulett’s website at www.tongaat.com under the ‘Business Rescue’ tab.
