The government of South Africa has moved to block the provisional liquidation of Tongaat Hulett Limited, warning that the collapse of the sugar producer could threaten thousands of jobs and rural livelihoods, particularly in KwaZulu-Natal, IOL reported.
Last month, the company’s business rescue practitioners approached the High Court seeking to end the rescue process and place Tongaat Hulett’s South African operations under provisional liquidation after attempts to stabilise the firm failed.
The Department of Trade, Industry and Competition (dtic) confirmed on Tuesday that it will oppose the liquidation proceedings in court and continue supporting efforts to find a workable solution for the company.
Director-General Simphiwe Hamilton told Parliament that the department and the minister are opposing the move along with several stakeholders in the sugar sector. The Industrial Development Corporation has also opposed the liquidation application.
Hamilton said most stakeholders believe liquidation is not the right course and that either the earlier approved rescue plan should be carried out or a revised proposal should be presented for creditors to consider.
He said efforts are under way to prevent the collapse of Tongaat Hulett by implementing the approved plan or by bringing in new strategic investors.
The matter is expected to be heard in the Durban High Court, where several parties are preparing to submit arguments against the liquidation. Judge Sanele Hlatshwayo is scheduled to hear the case during a virtual session on Friday.
Earlier, the trade department described Tongaat Hulett as an important company in the country’s sugar industry and warned that its liquidation could have wide-ranging effects in KwaZulu-Natal.
Officials said the collapse of the company could affect thousands of workers, small-scale sugarcane growers, rural economies and related industries. It could also worsen economic hardship in communities that already face challenges.
The department said it will continue discussions with stakeholders including the Industrial Development Corporation, labour unions, growers, lenders, investors and local communities to look for a sustainable solution.
At the same time, the government said it would respect the independence of the courts and ongoing legal processes.
Concerns have also been raised about the possible impact of the company’s financial troubles on infrastructure such as the Tongaat Water Treatment Works.
eThekwini Municipality said it has had an agreement with Tongaat Hulett Sugar since 2003 regarding the facility. Changes made in 2013 allowed staff to be transferred to the municipality, while another agreement between 2023 and 2025 provided land for a new machine control centre after floods in 2022.
The municipality said all equipment at the water treatment plant belongs to eThekwini Water Services and is run by municipal staff. However, the land on which the facility stands still belongs to Tongaat Hulett. Efforts by the municipality to purchase the land have been delayed because the company is under business rescue.
