Vision Consortium Clears Tongaat Hulett Debt, Paving Way for Takeover Completion

The long-awaited turnaround of sugar producer Tongaat Hulett has taken a major step forward. The Vision Consortium has successfully paid off the company’s outstanding debt to its lender group, clearing the way for the final phase of its acquisition.

The settlement marks a milestone in one of South Africa’s most closely watched business rescue cases. Tongaat’s Business Rescue Practitioners (BRPs) confirmed that South African banks and other creditors had received the outstanding funds, describing it as a “significant step forward” in executing the adopted rescue plan.

“This reinforces the BRPs’ confidence in the company’s ongoing viability,” the statement said.

From Collapse to Comeback

Once a giant in Southern Africa’s sugar sector, Tongaat Hulett entered business rescue in October 2022 after collapsing under R12 billion in value, largely due to alleged accounting fraud, runaway debt, and executive mismanagement.

Despite the turmoil, the company has kept operations going across its Maidstone, Amatikulu, and Felixton mills, as well as its refinery and animal feed divisions. Managing Director Dave Howells credited Industrial Development Corporation (IDC) funding and R1.425 billion in maintenance investment for helping the business remain viable.

“The immensity of the challenge cannot be overstated,” said Howells. “But protecting the livelihoods of thousands linked to our operations has remained our top priority.”

Takeover Back on Track

The Vision Consortium emerged as the sole remaining suitor earlier this year, after the RGS Consortium withdrew its competing bid just before a crucial vote in January. Vision’s plan won 98.5% creditor approval, setting the path forward.

The original proposal would have seen Vision inject new capital in exchange for a controlling stake, leaving current shareholders with just 2.7% ownership. But after shareholders rejected the equity deal, the BRPs were legally bound to execute the “alternative transaction”: a full sale of Tongaat’s operations.

That alternative is now being implemented after the required competition authority approvals and court backing, despite delays and legal challenges that the BRPs called “vexatious.”

The acquisition includes Tongaat’s sugar and animal feed businesses in South Africa, Zimbabwe, Mozambique, and Botswana — territories where the company continues to play a significant economic and employment role.

Howells remains optimistic: “The business is well positioned to transition toward stability and sustainability under Vision’s ownership. The strategic turnaround is already in motion.”

With this key financial hurdle now cleared, all eyes are on the completion of the transaction, which promises not only a lifeline for Tongaat Hulett but also much-needed security for workers, farmers, and regional economies tied to its operations.

Tongaat Hulett’s Sweet Comeback: Business Rescue Spurs Hope for Sugar Giant’s Future

{Source: Farmers weekly}

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