Tongaat Hulett to be sold as a going concern to Vision Investments

Sugar producer Tongaat Hulett has confirmed that it will be sold as a going concern to Vision Investments following the rejection of a proposed debt-to-equity swap by shareholders at a meeting last week.

The company said in a statement on Wednesday that the business rescue plan, adopted in January 2024, remains in place and is being actively implemented.

Despite the setback at the shareholders’ meeting, the company’s business rescue practitioners (BRPs) are confident in the plan’s ability to succeed.

“We confirm that the business rescue plan adopted in January 2024 remains unchanged, legally binding on all affected parties, and is actively being implemented,” the statement read.

The plan offered two options: a debt-to-equity swap, which would have seen Vision Investments acquiring a 97,3 percent stake in the company, or the sale of the company as a going concern. Shareholders rejected the first option.

“The adopted plan offered two options: . . . This would result in Vision Investments owning 97,3 percent of the company’s total issued share capital, with current shareholders owning the remainder,” the company said.

Tongaat Hulett emphasised that the sale of the company as a going concern does not mean it will be broken up. Instead, the entire business, including its operations and employees, will transfer to Vision Investments.

“Contrary to some media reports, this does not entail breaking up the group.

“Instead, THL’s business, including all its operations and employees, will transfer to Vision Investments,” the statement said.

The company clarified that the currently listed Tongaat Hulett Limited will be delisted and eventually liquidated, becoming an “empty shell.”

While the process of selling the company as a going concern is more complex than the debt-to-equity swap, Tongaat Hulett assured stakeholders that the outcome for employees, growers, creditors, and suppliers will remain the same.

“Although this process is more complex, it will achieve the same outcome for employees, growers, creditors, and suppliers,” the company said.

The company’s operational performance has reportedly improved due to strategic investments made during the rescue process, and the BRPs remain confident in the plan’s ability to succeed. — BH24