Tongaat Hulett last Tuesday voted to go ahead with a R4-billion rights offer, which the company believes will secure its future.

Mauritius-registered company Magister will soon own the majority share after the rights offer was overwhelmingly supported by shareholders during a special general meeting held last week.

South Africa’s largest sugar producer saw its shares plummet by 30% after it first shared news of the rights offer which could see Magister own 60% of Tongaat Hulett.

Magister Investments Limited is owned by Zimbabwe’s billionaire family, the Rudlands.

Tongaat Hulett is one of the largest employers on the North Coast and introduced several stringent cutbacks since 2019 in the wake of accounting irregularities.

Most recently, in another attempt to claw back finances, the company decided to act on forensic findings against former senior executives accused of overstating company profits over many years.

Tongaat Hulett instituted a civil claim of R450-million against former employees, CEO Peter Staude, chief financial officer Murray Munro and finance executive Sean Slabbert.

The forensic report included “unjustified enrichment, damages consequent upon the breach of their fiduciary duties, and misrepresentation.”

The company is also seeking to have the former executives declared delinquent directors.

The trial is expected to begin in early 2023.

Meanwhile, company CEO Gavin Hudson said they were happy with the outcome of the rights offer.

“This is a key step in securing the future of Tongaat Hulett, providing us with the mandate to further engage with shareholders to raise fresh capital to reduce our unsustainable debt levels,” he said.

The rights offer may only proceed once all lender and regulatory approvals have been obtained and other conditions fulfilled, all of which are in progress and expected to be concluded by the end of March.

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