Harare: The expected liquidation of South Africa’s Tongaat Hulett is not likely to disrupt sugar production in Zimbabwe, Hippo Valley Estates said, even as investors and industry players closely follow developments, The Zimbabwe Mail reported.
Tongaat Hulett wholly owns Triangle Ltd and holds a 50.3% controlling stake in Hippo Valley Estates. Together, the two companies produce more than half of Zimbabwe’s sugar, making the South African group’s restructuring a key issue for the sector.
Tongaat Hulett entered business rescue in October 2022 following financial difficulties linked to a corporate scandal that left it with liabilities estimated at R12 billion. This week, business rescue practitioners confirmed plans to apply for liquidation, saying all viable recovery options had been exhausted.
In response, Hippo Valley Estates sought to reassure stakeholders, stressing that the Zimbabwean operations are legally and financially independent.
“The developments in South Africa do not involve our Zimbabwe operations, which operate as separate legal entities with their own management, finances and operations,” the company said. It added that Triangle Ltd and Hippo Valley Estates remain financially stable, fully operational, and committed to meeting all obligations.
Attention is now turning to the contest over Tongaat Hulett’s assets. In 2024, a rescue plan proposed selling the group’s holdings to the Vision Group, a consortium that includes South African businessman Robert Gumede and Zimbabwean investor Rutenhuro Moyo.
Under that plan, Tongaat Hulett would have transferred all its shares and shareholder loan claims to Vision Sugar Holdings, giving the consortium control of Triangle Ltd and an indirect majority stake in Hippo Valley Estates.
The restructuring initially focused on converting debt into equity, with an asset sale as a fallback. After buying Tongaat’s bank debt, the Vision Group became the main secured lender. However, its failure to secure refinancing from the Industrial Development Corporation stalled the rescue effort, contributing to the move toward liquidation.
With secured claims estimated at about R8 billion, the Vision Group is expected to have significant influence over how Tongaat’s assets are eventually disposed of.
Tongaat Hulett’s assets have attracted interest in the past. In 2022, shareholders rejected a rescue proposal from Zimbabwean businessman Hamish Rudland, whose company Magister Investments offered to back a R4 billion rights issue.
More recently, Zimbabwean authorities opposed a proposed acquisition by Tanzania’s Karega, instead signalling a preference for involvement by the Mutapa Investment Fund. Treasury Secretary George Guvamatanga has previously said the government views the sugar estates as strategically important beyond purely commercial considerations.
Regulatory issues also remain in focus. In 2021, Tongaat Hulett’s Zimbabwe sugar milling licence was extended to December 2040, while talks continue over 99-year land leases. The company is also involved in Project Kilimanjaro, an initiative aimed at expanding sugar production through smallholder farmers.
While no immediate disruption to operations is expected, market watchers remain alert to how liquidation proceedings in South Africa could reshape ownership in Zimbabwe’s vital sugar industry.
