The coalition says its proposal is built around the long-term sustainability of the fragile company, with its members listed as equity partners.
Several small- and large-scale growers have merged to form a grower-led group in what it is believed to be a last-ditch attempt to resuscitate ailing Tongaat Hulett, which is on the brink of liquidation when the matter goes to a hearing in June 2026.
With no firm solution in sight to prevent its total collapse, GrowerCo has swooped in with a view of securing the funding necessary to keep Tongaat Hulett’s mills and refinery operational.
The coalition says its proposal is built around the long-term sustainability of Tongaat Hulett, with its members listed as potential equity partners as opposed to “an extractive private-equity model”.
While GrowerCo describes itself as an independent initiative, it has received backing from the SA Canegrowers Association and the South African Farmers’ Development Association.
“It is focused on maintaining milling operations, safeguarding jobs, and preserving economic activity across rural KwaZulu-Natal [KZN],” its founders said in a statement on Thursday.
The 130-year-old Tongaat Hulett supports between 35 000 and 40 000 direct jobs at farm level and at its mills and its refinery, making it an economic anchor for entire rural communities.
This is especially true in KZN, where Tongaat Hulett is a dominant driver of economic activity. The province alone accounts for about 77% of the sugar industry’s revenue.
GrowerCo believes that, with the support of long-term and patient capital, the proposal presents a viable opportunity to unlock sustainable value over time by stabilising and strengthening one of South Africa’s most important agricultural value chains.
It estimates that “debtors would be able to realise R3 billion to R4.5 billion for Tongaat Hulett if it is sold as a going concern, whereas value recovery during liquidation would be as low as R1 billion to R1.5 billion.
“Under this model, every creditor recovers more,” says Pratish Sharma, a grower who supplies Tongaat Hulett’s Maidstone mill.
In April 2026, the company was given another lifeline through additional funding of R200 million, giving it a boost to start milling in the current season.
Tongaat’s mills are expected to open in the coming weeks, contributing to what has already been labelled as a good start to the season.
Tongaat was placed in business rescue in October 2022.
Vision Group, led by South African entrepreneur Robert Gumede and Zimbabwean businessman Rute Moyo, became the controlling creditor after acquiring its bank loans. It then used its creditor voting power to approve its own business rescue plan.
But, in February this year, the business rescue practitioners (BRPs) lodged a winding up application, saying the plan was incapable of being implemented because the Vision Group had shifted the goalposts and was demanding further funding from the Industrial Development Corporation.
In its latest public clash with Tongaat’s BRPs, Vision said it “remains focused on the upcoming liquidation hearing on 17 June 2026 at the Durban High Court, where it will continue to advocate for a resolution that prioritises job preservation and the continued operation of these heritage assets”.
“As any lender of substantial funds would be entitled to do against a borrower which is in default, prudent steps have been taken to preserve security.”
Vision holds R11 billion in secured claims over Tongaat’s assets.
Without a resolution to the ownership and recovery debacle, almost 18 000 growers would be affected, bringing the sugar industry to its knees.
Trading in Tongaat Hulett shares on the JSE remains suspended.
This article was republished from Moneyweb. Read the original here.
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