Thousands of canegrowers supplying Tongaat Hulett mills will be able to support their livelihoods this crushing season following a last-minute R200m funding extension for the embattled sugar giant.

North Coast Courier reports that the funding comes from the Industrial Development Corporation (IDC), taking its post-commencement financing for Tongaat Hulett’s business rescue process from R2.3- to R2.5b.

It gives Tongaat Hulett enough liquidity to operate until the end of June. Local mills set to reopen include Maidstone, Felixton and Amatikulu, collectively servicing thousands of farmers in surrounding communities.

The IDC agreed to extend the funding on Wednesday, a day before Tongaat Hulett’s business rescue practitioners (BRPs) returned to the Durban High Court yesterday for the hearing of their provisional liquidation application.

The BRPs applied for provisional liquidation in February, claiming that they had exhausted all reasonable options for the adoption of the approved business rescue plan.

In light of the funding and the wide-ranging potential implications of liquidation throughout the province, Judge Rithy Singh agreed to an adjournment of the application until June 17 and 18.

“The adjournment was supported by, inter alia, the BRPs, IDC, the Vision Consortium and the South African Cane Growers Association,” says the BRPs.

“While the post commencement financing developments address the company’s immediate short-term liquidity requirements, the BRPs have previously indicated that a further requirement for any withdrawal of the liquidation application would be the existence of a concrete and implementable transaction capable of achieving the objectives of business rescue.

“The postponement will allow parties additional time to progress engagements in this regard.”

The South African Farmers Development Association (Safda) welcomed the temporary funding.

“We wish to commend the IDC for providing the much-needed funding that will allow Tongaat Hulett to finish off their off-crop maintenance of the mills and be ready to open for crushing for the current season that commences on May 1,” says Safda chief executive officer Dr Siyabonga Madlala.

“Farmers have been waiting with bated breath as to whether Tongaat Hulett mills will even open this season given the uncertainty about the liquidation hearing, while dealing with other challenges like the sugar imports that continue to hit our shores.”

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