‘The parties have chosen to instead work together to keep Tongaat Hullet operating and to protect the value it holds for its employees.’
Tongaat Hulett, South Africa’s century-old sugar giant, has been saved from being liquidated at the eleventh hour, saving at least 250 000 jobs across the country’s sugar industry value chain.
Tongaat Hulett’s business rescue practitioners, the Industrial Development Corporation (IDC) and the Vision Group of companies were able to strike a deal that will save the historic sugar producer from collapse hours before the Durban High Court was due to hear a liquidation case on Wednesday.
The court granted the business rescue practitioners leave to withdraw the liquidation application.
Inside the Tongaat Hulett agreement
In a joint media statement, the parties outlined that the agreement will see the IDC become a significant shareholder in Vision companies across South Africa, Zimbabwe, Mozambique and Botswana.
In addition, the IDC will extend Tongaat Hulett’s post-commencement finance (PCF) facility to September 2026, providing continued liquidity to support the company’s operations while the business rescue transaction is implemented.
“The parties have chosen to instead work together to keep Tongaat Hullet operating and to protect the value it holds for its employees, growers, suppliers, lenders and the many communities across the region who depend on it,” read the statement.
Urgency to save Tongaat Hulett
“The parties have committed to work together in good faith and with urgency to bring the transaction to completion.
“Their shared objective is to stabilise the business, support the broader sugar value chain and position the operations for long-term sustainability and recovery,” read the statement.
In addition, the parties have also agreed to restructure the IDC’s PCF into equity at the appropriate level as part of the overall transaction framework, supporting a more sustainable capital structure on emergence from business rescue.
Commitment to protecting jobs
IDC CEO Mmakgoshi Lekhethe said the agreement reflects a commitment to protecting jobs, maintaining productive capacity and supporting the long-term recovery of the sugar industry.
“Our role is aligned to our developmental mandate: to preserve industrial capability, support jobs and enable sustainable economic participation in sectors that are important to South Africa and the region,” she said.
Robert Gumede, one of Vision’s Group partners, said: “I am heartened that the final negotiations and agreement to save the sugar industry, the 250 000 jobs and the growers’ investments where black business is stepping up to save a 134-year-old sugar group operating in the SADC region.”