Tongaat Hulett secures funds to operate until end of June

Troubled sugar refiner Tongaat Hulett Limited (THL), which has been under business rescue since late last year, has secured funding to continue business operations until the end of next month.

This transpired as its business rescue practitioners on Friday filed court papers to stave off obligations to pay outstanding levies to the South African (SA) Sugar Association for the duration of the business rescue proceedings.

RCL Foods in March brought Tongaat Hulett business rescue practitioners before the Sugar Industry Appeals Tribunal due to the refiner’s failure to pay outstanding levies to the SA Sugar Association.

Labour union United Association of South Africa (Uasa) yesterday in a statement said it was pleased to note the extension of the business plan.

“Tongaat Hulett’s business rescue plan has been extended. The company believes it stands a reasonable chance of being rescued, within the meaning of section 128(1)(h) of the Companies Act, in a manner that will balance the rights and interests of all affected,” it said.

Uasa spokesperson Abigail Moyo said the general union supported Tongaat Hulett’s management during the process, because the organisation’s survival was crucial to the sector.

“Despite the company’s many challenges, saving jobs and ensuring the industry does not crumble is our responsibility.”

She said they encouraged Tongaat Hulett’s management, stakeholders, business rescue and industry partners to continue working together to save the entity as the industry could not tolerate any more job losses.

In April, SA Canegrowers chairperson Andrew Russell said Tongaat Hulett’s failure to pay more than N$900 million due to the SA Sugar Association at the end of March, and a further default by the Gledhow mill, which was also in business rescue, had resulted in an 8% drop in the final rateable value (RV) price (the price that growers receive for the cane processed) for the 2022/23 season.

Russell said at the time they were disappointed by these defaults, which in total would cost the industry N$1,5 billion, of which N$1 billion was deducted from the growers’ proceeds (the RV price).

“More than 20 000 small-scale growers will have to carry their share of the cost of these decisions, with the RV price (the final revenue determined for growers) dropping by R424 per tonne at the end of the season.

“The resulting decline in revenue now threatens the livelihoods of thousands of small-scale growers and the workers they employ,” he said.

On Friday, Tongaat Hulett’s business rescue practitioners said in an update on their website it had – via Werksmans Attorneys – filed papers at the Durban High Court seeking to suspend, for the duration of the business rescue proceedings, any obligation to pay outstanding levies to the SA Sugar Association.

They also want the court to strike out or permanently stay the application instituted by RCL Foods before the Sugar Industry Appeals Tribunal, on or about 31 March, ordering RCL Foods to pay the applicants’ costs in respect of the Sugar Appeals.

The named respondents in the court application are SA Sugar Association, SA Sugar Export Corporation, Trade and Industry minister Ebrahim Patel, SA Sugar Millers’ Association, SA Cane Growers’ Association, SA Farmers’ Development Association, RCL Foods Sugar & Milling, Illovo Sugar (South Africa), Umfolozi Sugar Mill, Gledhow Sugar, Harry Sidney Spain, UCL Company, all registered growers, and the affected persons in THL’s business rescue as defined in Section 128 of the act.

– IOL News