Businessman Robert Gumede’s Vision consortium has received approval from creditors to save the ailing sugar group, Tongaat Hulett.
The approval marks the end of a challenging business rescue process, according to Trevor Murgatroyd from Metis Strategic Advisors, one of the business rescue practitioners involved.
Under the plan, Vision, which includes investors from Zimbabwe and Pakistan, will acquire Tongaat’s R8bn debt through a partial debt-for-equity swap arrangement. Murgatroyd emphasized that while the approval and adoption of the plan is a milestone, there is still a lot of hard work ahead.
YOU MAY ALSO LIKE: Twitch To Lay Off 35% Of Its Workforce Amidst Financial Concerns
The support of employees, suppliers, the Industrial Development Corporation (IDC), and Vision will be crucial in achieving substantial implementation of the business rescue plan efficiently and quickly.
The IDC has already provided R2.3bn to Tongaat’s operations since late 2022. Murgatroyd highlighted that substantial implementation will mark a new beginning for a company that has been in existence for over 100 years and has a significant impact on the economy of KwaZulu-Natal and South Africa.
Approximately 25,000 people, mostly in KwaZulu-Natal, rely on Tongaat for their livelihoods. The company also has operations in Botswana, Mozambique, and Zimbabwe.
Vision plans to keep Tongaat listed and sees potential for creating new jobs as the business grows under its leadership.
Rob Bessinger, a spokesperson for the consortium, expressed elation over the outcome after a lengthy and controversial bidding process. He emphasized that Tongaat is a key strategic asset in the Sadc region, employing around 40,000 people and working with numerous small-scale cane growers and stakeholders in the sugar cane industry.
YOU MAY ALSO LIKE: South Africa Faces Compliance Challenges In Bid To Exit Grey List by 2025
Vision conducted thorough due diligence in South Africa, Zimbabwe, Botswana, and Mozambique, where Tongaat is the leading sugar company and a major employer. Bessinger stated that the consortium has a sustainable plan to turn around, grow, and diversify the group back into relevance.
Vision also acknowledged the role played by the business rescue practitioners, Tongaat’s employees, and the IDC during the rescue process. Bessinger expressed hope that the IDC would continue providing support to Tongaat during this crucial time, as it plays a vital role in the company’s future success.
