The government of KwaZulu-Natal has announced plans to prevent the liquidation of Tongaat Hulett after the historic sugar producer filed for liquidation last week, IOL reported.
Premier Thamsanqa Ntuli said efforts are under way to rescue the 134-year-old company in order to protect about 2,500 direct jobs and support thousands of small-scale sugarcane growers who rely on it for their livelihoods.
The Durban-based group confirmed that it had taken steps toward liquidation after its business rescue plan failed to deliver a workable outcome. Addressing the media during the Cabinet Lekgotla in Durban on Thursday, Ntuli said the issue was being discussed by the provincial Cabinet and other stakeholders with the aim of keeping the company operational.
He added that the matter had drawn the attention of the national government, which is also involved in finding a solution. Ntuli expressed confidence that a way forward could be found to avoid the company being wound up.
Tongaat Hulett entered voluntary business rescue in October 2022. Business rescue practitioners said the move followed serious accounting irregularities and governance failures under previous management, which led to the loss of about R12 billion in shareholder value.
In January 2024, creditors approved a recovery plan that involved the Vision Consortium, led by businessman Robert Gumede, acquiring the company’s assets. However, the practitioners later said the deal depended on three key conditions being met. These included refinancing a R2.3 billion facility from the Industrial Development Corporation and securing R517 million in an escrow account for the South African Sugar Association.
Financial analysts have warned that if the latest rescue attempt fails, 2,500 direct jobs could be lost, along with the livelihoods of many others connected to the sugar value chain.
In a statement, the SA Canegrowers’ Association said liquidation would threaten the wider South African sugar industry and the roughly one million livelihoods it supports. The association also raised concerns about the 25,000 small-scale sugarcane growers who depend directly on the company’s continued operations.
