KwaZulu-Natal Premier Thamsanqa Ntuli has announced plans to save the financially struggling Tongaat Hulett Sugar from liquidation.
Last week, the 134-year-old sugar giant announced that it had filed for liquidation after business rescue plans failed.
Speaking to the media during the Cabinet Lekgotla in Durban on Thursday, Ntuli said the company’s matter was on the agenda for discussion by the Cabinet and other stakeholders, with the sole aim of saving it from going under the hammer.
“This is a concern not for us as a provincial government but for the national government as well. The national government is also intervening, and I am hopeful that the company will be saved. It is on the agenda in our Lekgotla, so we are going to find a solution to save the company,” said Ntuli.
The Durban-based company entered voluntary business rescue in October 2022. Business rescue practitioners indicated that this was due to ‘severe historic accounting irregularities, financial misstatements, and governance failures’ under previous management, resulting in the destruction of approximately R12 billion in shareholder value.
A rescue plan, approved by creditors in January 2024, relied on Robert Gumede’s Vision Consortium acquiring the company’s assets. However, practitioners later reported that the deal depended on three “critical conditions”, including refinancing a R2.3 billion Industrial Development Corporation (IDC) facility and funding a R517 million escrow account for the South African Sugar Association.
Financial experts have already predicted that if the government’s rescue does not succeed, 2,500 direct jobs and millions of livelihoods will be affected.
In a media statement, the SA Canegrowers’ Association warned that liquidation of the company posed a risk to the entire South African sugar sector and the million livelihoods it supports. Other concerns include the 25,000 small-scale sugar cane growers who are directly dependent on the existence of the company.
willem.phungula@inl.co.za
