By Charmaine Ndlela
Tongaat Hulett has been pulled back from the brink of liquidation after its business rescue practitioners reached an agreement with the Industrial Development Corporation (IDC) and Vision Group to keep the 134-year-old sugar producer trading and proceed with its sale.
The agreement, reached on Wednesday, clears the way for the implementation of the company’s business rescue plan and the transfer of the company to Vision Group, while giving the debt-laden sugar producer access to further funding as the transaction is completed.
The business rescue practitioners withdrew their liquidation application in the Durban High Court after the agreement was concluded.
Under the deal, the IDC will extend post-commencement finance support to Tongaat Hulett until the end of September 2026 and convert its funding into equity as part of the rescue transaction. The IDC will become a significant shareholder in Vision operating companies across South Africa, Zimbabwe, Mozambique and Botswana.
Vision Group is expected to provide funding required to settle creditor claims, including obligations linked to the South African Sugar Association, and conclude new sale agreements for Tongaat Hulett’s South African operations and regional interests.
Tongaat Hulett has been in business rescue since 2022 after years of financial distress because of accounting irregularities. Its possible liquidation raised alarm across the sugar industry, with thousands of jobs, growers, suppliers and rural communities dependent on its mills and refinery.
SA Canegrowers welcomed the agreement, saying it removed the immediate threat of liquidation and brought relief to growers, workers and communities that rely on the company.
“This agreement is a significant milestone in securing the future of the modern South African sugar industry. With the liquidation of Tongaat Hulett off the table, we hope that its mills and refinery can now focus on operating without interruption. More than 17,500 supplying sugarcane growers rely on Tongaat,” SA Canegrowers chairman Higgins Mdluli said on Wednesday.
Tongaat Hulett operates three sugar mills and the country’s only standalone white sugar refinery, supplying sugar used in food and beverage manufacturing, including beverages, biscuits and confectionery.
The sugar industry supports more than one million livelihoods, from growers and mill workers to transporters, suppliers and manufacturers.
Tongaat Hulett’s mills had continued operating during the uncertainty, partly because of bridging finance provided by the IDC.
The growers’ body said the industry now needed to focus on longer-term stability, including the pressure placed on local producers by imported sugar.
“As a unified industry, we can also address other immediate challenges facing us, especially the still persistent flood of imported sugar into South Africa. Unfairly subsidised sugar from countries such as Brazil and Thailand is currently displacing locally produced sugar from retailers and food and beverage manufacturers. This affects growers and local millers alike – including Tongaat Hulett,” Mdluli said.
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