The possible liquidation of KwaZulu-Natal sugar giant Tongaat Hulett Ltd (THL) has been thwarted after a deal to save the 134-year-old entity was reached.
The provisional liquidation case was scheduled to reconvene in the Durban High Court on Wednesday and Thursday. But the Business Rescue Practitioners (BRPS), the main applicant, withdrew the matter. The move means more than 250 000 jobs that rely on the sugar value chain will be retained.
"The Business Rescue Practitioners of Tongaat Hulett Limited (in Business Rescue), the Industrial Development Corporation (IDC) and the Vision Group of companies have concluded a binding agreement that provides a pathway to preserve Tongaat Hulett’s business rescue, maintain trading operations and support implementation of the approved business rescue plan," the parties said in a joint statement on Wednesday.
The agreement will see the IDC become a significant shareholder in Vision, operating companies across South Africa, Zimbabwe, Mozambique and Botswana, while extending post-commencement finance support until the end of September 2026.
The state-owned entity said the developments were crucial in concluding the steps required for Tongaat Hulett to exit the business rescue process.
"Under the agreement, the IDC will extend its post-commencement finance (PCF) support to enable Tongaat Hulett to continue trading while the transaction is implemented. The parties have also agreed to restructure the IDC’s PCF into equity at the appropriate level as part of the overall transaction framework, supporting a more sustainable capital structure on emergence from business rescue," the statement said.
During the court proceedings in April, the Vision Sugar Group, THL’s largest secured creditor, had called for postponement after the IDC made more than R200 million available in a last-minute bid to allow THL to continue operations while devising other plans to save the entity.
"There are good prospects that we can get this company over the line by June. We want to give the company a chance to survive," advocate Blou van Kerckhoven SC, on behalf of Vision Sugar Group, told Judge Rithy Singh.
IDC CEO Mmakgoshi Lekhethe said the agreement reflected the entity's commitment to supporting an outcome that safeguarded productive capacity, protected livelihoods across the sugar value chain and created a credible platform for long-term recovery.
"Our role is aligned to our developmental mandate: to preserve industrial capability, support jobs and enable sustainable economic participation in sectors that are important to South Africa and the region," she said.
The Vision Group, on the other hand, said the consortium intended to invest in the recovery of Tongaat Hulett's operations, to support the growers and suppliers who formed the backbone of the value chain and to safeguard the livelihoods that depended on a strong and stable business.
“I am heartened that the final negotiations and agreement to save the sugar industry, the 250 000 jobs and the growers investments where black business is stepping up to save a 134 year-old sugar group operating in the SADC region,” Robert Gumede, one of Vision's Group partners, said.
“This is a significant milestone for Vision, a black-owned company that is the second-biggest employer in Zimbabwe and Mozambique after the government employees.
“Vision is confident to turn the fortunes of the companies and hopes the SA government shall from now on protect the jobs and industry from the dumping of foreign produced sugar from Brazil and Thailand.
“Lastly, Vision is looking forward to working with Sasa [South African Sugar Association], growers, labour unions, our key clients and suppliers."
The collapse of THL would have spelt disaster for the KZN economy and many other rural towns who rely on the sugar sector for survival. This includes small-scale farmers depending on Tongaat Hulett owned mills for crushing their produce.