South Africa's Tongaat Hulett Moves to Liquidation, Impacting Over 15,000 Sugarcane Farmers
- Business Rescue Practitioners (BRPs) have moved to liquidate Tongaat Hulett in South Africa
- The liquidation is set to impact over 15,000 sugarcane farmers in KwaZulu-Natal
- Business Rescue Practitioners concluded that no viable rescue options remain for Tongaat Hulett
Justin Williams, a journalist at Briefly News since 2024, covers South Africa’s current affairs. Before joining Briefly News, he served as a writer and chief editor at Right for Education Africa’s South African chapter.
Source: Twitter
KWAZULUA-NATAL - The liquidation of Tongaat Hulett will hit 15,446 sugarcane farmers in KwaZulu-Natal, the South African Farmers Development Association (SAFDA) has warned.
Small-scale growers at risk
The farmers supply three mills in Tongaat (Maidstone), Gingindlovu (Amatigulu) and Empangeni (Felixton). SAFDA chairperson Dr Siyabonga Madlala said the collapse places small-scale growers at greatest risk. He said they are expected deliver more than one million tons of sugarcane in the season that ends on 31 March 2026 and generate about R845.7 million in revenue. That income supports households, farm workers and local businesses. Business Rescue Practitioners (BRPs) have moved to liquidate Tongaat Hulett after efforts to save the company failed. They approached the KwaZulu-Natal High Court to terminate business rescue and place the group into provisional liquidation. The BRPs said they had exhausted all reasonable avenues to rescue the company, founded in 1892.
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According to BusinessTech, the rescue plan collapsed after sale agreements with Vision lapsed. Creditors approved the plan in January 2024. It was based on a debt-to-equity swap or, failing that, the sale of assets to Vision. Shareholders did not back the debt-to-equity option. The fallback required Vision to acquire Tongaat's South African operating assets and invest in operations in Zimbabwe, Mozambique and Botswana. The plan hinged on three conditions. Vision had to refinance the Industrial Development Corporation's R2.3 billion post-commencement funding facility. It had to fund a R517 million escrow account linked to the South African Sugar Association, pending legal proceedings. It also had to provide R75 million for concurrent creditors.
Source: Twitter
Introducing new funding demands
Vision bought the lender group claims in May 2025. The plan then depended on refinancing the IDC facility and meeting the escrow requirement. Vision sought funding from the IDC, but talks dragged on for months. Tongaat accused Vision of introducing new funding demands beyond those contained in the approved plan. The company said the additional conditions complicated and delayed discussions at a time when its liquidity was under severe strain.
As sale agreements neared expiry, the IDC and its advisers finalised feedback on funding proposals. The BRPs asked Vision for a short extension. Tongaat said Vision agreed in principle but attached new material conditions. The BRPs rejected them, saying they undermined the agreed rescue methodology and exposed the company to significant commercial risk. They warned that the conditions could place Tongaat in breach of contractual obligations to third parties.
Tongaat has since received a letter of demand from Vision for about R11.7 billion, said to be immediately due and payable. The company said the claim threatens its solvency and poses an immediate risk to its continued existence. The BRPs concluded there is no reasonable prospect of rescuing Tongaat as a going concern. The liquidation affects Tongaat Hulett Limited in South Africa only. Operations in Zimbabwe, Mozambique and Botswana continue to trade.
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The company said retrenchments are the cause of a sharp decline in sales, with the sharpest drop in Europe and the Americas.
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Source: Briefly News
