Tongaat Hulett has avoided liquidation following an agreement between South Africa’s Industrial Development Corporation (IDC) and the Vision group, paving the way for the implementation of the recovery plan for the historic sugar company and ensuring the continuity of its operations in Southern Africa, including Mozambique.
According to Engineering News, the agreement was reached with the company’s business rescue practitioners and provides for the continuation of operations while the necessary procedures are completed to finalise the restructuring.
Under the terms of the deal, the IDC will acquire a significant shareholding in Vision group companies in South Africa, Zimbabwe, Mozambique and Botswana, while also extending the emergency funding granted to Tongaat Hulett until the end of September.
The parties have also agreed to convert part of this funding into equity, a measure expected to strengthen the company’s financial structure and facilitate its exit from business rescue proceedings.
Vision has committed to financing the settlement of Tongaat Hulett’s obligations to creditors and sector partners, creating conditions for the effective implementation of the approved recovery plan. The agreement also includes new contracts for the transfer of the company’s South African operations and its stakes in subsidiaries located in Zimbabwe, Botswana and Mozambique to Vision.
With the deal in place, the liquidation petition that was due to be considered by the South African High Court will be withdrawn, avoiding a scenario that could have jeopardised thousands of jobs and disrupted the entire regional sugar value chain.
According to stakeholders, the operation will help preserve around 250,000 jobs linked to the sugar industry, including workers, sugarcane farmers, suppliers and service providers dependent on the company’s activities.
Vision chairman Robert Gumede described the agreement as a major milestone for the recovery of Tongaat Hulett and for the stability of the sugar industry across the Southern African Development Community (SADC).
IDC CEO Mmakgoshi Lekhethe stated that the transaction aligns with the institution’s mandate to preserve industrial capacity, protect jobs and support strategic sectors for regional economic development.
The South African Sugarcane Growers’ Association also welcomed the agreement, stressing that the solution removes the immediate risk of closure and ensures the continuity of industrial operations.
With more than 130 years of history, Tongaat Hulett is one of the most important sugar companies in Southern Africa, operating industrial plants and agricultural assets in South Africa, Zimbabwe, Mozambique and Botswana. Its recovery is being closely watched by markets due to its impact on employment, agricultural production and supply chains in the sector.
For Mozambique, the agreement reduces uncertainty over the future of the company’s assets in the country and strengthens prospects for the continuity of operations linked to the regional sugar value chain, considered strategic for food security, rural employment and agro-industrial exports.
Source: Diário Económico
