Tongaat business rescue plan approval excites Hippo
SUGAR miller Hippo Valley Estates Limited says the acceptance of the Tongaat Hulett business rescue plan by creditors is positive news for its employees and businesses across all geographies as well as stakeholders.
On Thursday last week, the business rescue practitioners announced that 98,51% of Tongaat’s creditors had voted in favour of adopting the Vision Parties rescue plan, which will see it being bought by a consortium of companies led by Robert Gumede, the founder of the Gijima Group.
Vision Parties comprises South Africa’s Terris Sugar, Guma (from Mauritius), Remoggo (from Zimbabwe) and Almoiz Industries, a sugar producer based in Lahore, Pakistan.In February 2023, Tongaat’s twhen chief executive officer Gavin Hudson, resigned after struggling to reduce the company’s debt burden by R6,5 billion (US$353,58 million) and turn around its governance and operational processes since the discovery of accounting irregularities in 2019.
This was despite the group having commenced a business rescue plan in October 2022 to attract fresh capital, owing to the above challenges, which was entered into by Tongaat and sister firm, Tongaat Hulett Development Proprietary Limited.
In a letter to stakeholders dated January 11, 2024, Hippo corporate and industry affairs head Dahlia Garwe said the acceptance of the business rescue plan was positive news for the company’s employees and businesses across all geographies.
“The business rescue practitioners today announced that creditors voted in favour of the Vision Parties’ business rescue plan,” she said.“This is positive news for our employees, our businesses across all geographies and our stakeholders. While there is still much (to) be done in our journey, today we are celebrating the achievement of a key milestone.
She said the developments provided some certainty to stakeholders on the way forward.“The executive team would like to express our gratitude to you, the business rescue practitioners, our lender group, the IDC, SASA, our creditors, Vision Parties and the various stakeholders who have walked this journey with us so far,” she said.
According to the Hippo executive, the business rescue practitioners will now proceed with the implementation of the adopted plan.“Tongaat Hulett Limited can only exit business rescue once the plan has been substantially implemented (which could take several months) or alternatively if it is no longer financially distressed,” Garwe said.
“In the affected person’s meeting, the Vision representative, Robert Bessinger shared that the Vision Consortium believes that Tongaat is a leading sugar and animal feeds business with a good asset base across southern Africa.”
She said they were committed to keeping the group together and had developed five strategic pillars that would be implemented to create a sustainable business.“The Tongaat executive team has expressed its gratitude to the Vision Consortium for investing in Tongaat and look forward to supporting the successful implementation of the strategy,” Garwe added.-newsday
