Embattled sugar and property company Tongaat Hulett has again extended the deadline for publication of its business rescue plan, saying it needs to finalise complex work streams.
Tongaat entered voluntary business rescue on 27 October last year, after it could not pay back its lenders. According to the Companies Act, when that happens a business rescue plan must be published within 25 business days, but lenders or a court can decide otherwise.
In early November, Tongaat’s business rescue practitioners (BRPs) asked lenders to extend the time for publishing the plan by about two months until the end of January. The lenders agreed and the new publication date was 31 January. Last Thursday, the BRPs wrote to Tongaat’s creditors requesting another extension.
“The practitioners have been engaged in securing post-commencement finance for the company and its subsidiary companies, meeting with affected persons and other stakeholders and assessing the company’s business records and contractual and legislative obligations, which are very complex. All these activities, a number of which are ongoing (in particular the investigation of the company’s affairs), are very time consuming and were severely restricted during the immediately preceding holiday season,” the BRPs said in the letter.
In a statement on Monday, the BRPs said the required majority of creditors had voted in favour of an extension of the date for publication of the business rescue plan from 31 January to 28 February.
In December, the sugar giant announced that it had received post-commencement finance — money given to a company in business rescue — from the Industrial Development Corporation. This undisclosed sum is to fund the working capital requirements and off-crop maintenance.
“This key step in the business rescue process allows the BRPs to focus on the next phase of the business rescue proceedings aimed at achieving successful business rescues for Tongaat Hulett and its underlying businesses,” the statement read.
No update was given on the KwaZulu-Natal grower-led consortium NewCo, which wants to buy Tongaat. The Mail & Guardian previously contacted Tongaat’s business rescue practitioners but they signalled they were not in a position to comment on whether they had been approached by NewCo.
Chief executive quits
On Monday, chief executive Gavin Hudson tendered his resignation with effect from 28 February. His core team of executives will continue to work with the BRPs.
“Hudson spearheaded efforts to recover the group four years ago following the discovery of accounting irregularities in 2019,” the statement read.
“This involved reducing the group’s debt burden by R6.5 billion and turning around governance and operational processes. Unfortunately, these turnaround efforts were hampered by Covid-19, civil unrest and floods in KwaZulu-Natal and the company commenced business rescue proceedings.”
Hudson was appointed in 2019 to drive the group’s recovery. His replacement has not yet been announced.
