According to the South African Farmers Development Association (Safda), outstanding Tongaat Hulett payments to sugar cane growers will be made by November 11.

This emerged in a meeting between sugar industry stakeholders, such as Safda and the South African Canegrowers Association, and Tongaat Hulett business rescue practitioners (BRPs) on Wednesday.

The company had missed an October 31 payment deadline for more than R400m that was owed to growers for 600 000 tonnes of cane delivered in September.

A further R345m will be due at the end of November.

“Following our meeting this morning with the BRPs, we are happy to announce that farmers can rest assured they will be paid by November 11. This somewhat brings relief to suspicions that farmers would not get paid and at least gives some comfort,” said Safda chairperson Siyabonga Madlala.

Despite being late, the confirmation of payment will provide some stability to the 4 300 growers and estimated 14 642 employees directly affected.

This aside from all tangential jobs within the industry, including hauliers, mill workers and other service providers.

As for ongoing operations, it is understood that Tongaat Hulett’s three mills at Amatikulu, Felixton and Maidstone are either temporarily closed or in the process of closing.

“The engagement, though positive, also highlighted the magnitude of the task at hand, and the necessity of government intervention to ensure Tongaat Hulett’s supplying growers can survive while the business rescue process continues.

“Based on this engagement, SA Canegrowers is optimistic that the BRPs understand the urgency of addressing the non-payment of growers, and the importance of restoring the operation of Tongaat Hulett mills as soon as possible,” said SA Canegrowers chairperson Andrew Russell.

The association has written to the Minister of Agriculture, Land Reform and Rural Development, Thoko Didiza, Minister of Trade, Industry, and Competition, Ebrahim Patel, and President Cyril Ramaphosa, among others, to request urgent engagements on the necessity of government financial intervention.

“Given the magnitude of the challenge at hand, SA Canegrowers does not believe the industry can withstand the present peril without financial assistance from government.

“This is why we have requested urgent meetings with the president, Minister Patel and Minister Didiza to discuss what funding government can make available to ensure work done under the auspices of the Sugarcane Value Chain Masterplan over the past two years to position the sugar industry for the future has not been in vain,” said Russell.

At the time of Tongaat Hulett’s voluntary business rescue on October 27, the company was saddled with R5.1b in debt, down from a high of R11.7b.

More pressingly, however, the company said it was R1.5b short in its working capital facilities.

In February, Finance Minister Enoch Godongwana indicated a move away from bailing out state-owned entities, which had cost the state R308b.

It is yet to be seen what the precedent on doing so for a privately-owned company will be, even with such far-reaching impacts in KZN.

At the time of publication, Tongaat Hulett had not confirmed payment dates, indicating that communication will be directly with stakeholders at this point in the business rescue process.

Further clarity going forward is expected when the company convenes a meeting with stakeholders and creditors as part of the process, expected to be held next Tuesday.