Tongaat Hulett business rescue plan delayed again

Tongaat Hulett’s long-awaited business rescue plan has been delayed until the end of May after the company received an extension of post-commencement funding.

The plan was initially expected at the end of January, then March, but a majority of creditors have again agreed to an extension under the promise of further clarity.

Post-commencement funding has been secured until the end of June.

“This is anticipated to be sufficient for working capital purposes and provide comfort to employees and suppliers that payments should be made going forward,” said the business rescue practitioners (BRPs) last week.

The announcement should provide some solace for farmers who have faced an uncertain few months, most recently when the other major North Coast operator, Gledhow Sugar Company, entered its own business rescue proceedings last month.

With the postponement of the plan, the BRPs said they will have more time to provide detailed feedback to shareholders and creditors about the company’s future.

Specifically, it will allow the creditors a chance to vote on a potential sale of the company or further funding support via an equity partner, with that process to finish on May 26.

“This will allow the plan to contain information on a transaction and/or structure that the creditors will be asked to vote on. Discussions and negotiations are ongoing with various stakeholders,” said the BRPs.

A buyout could return some certainty to the tumultuous sugar market.

So far, the only offer made public was from grower consortium NewCo, who made their bid clear in December.

There have been no further updates on that bid or of other potential suitors to date.

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