Tongaat Hulett said on Friday it would not be able to release its provisional annual financial results for the financial year ended 31 March 2022 by 30 June 2022 as required by the JSE.
It cited both the board and the auditor needing more certainty around debt refinancing and balance sheet restructuring.
Tongaat is struggling following years of irregularities that have left it with a R6.8bn pile of debt while former directors, including ex-CEO Peter Staude, face fraud charges.
The group announced last month that it had established a restructuring committee to oversee and approve negotiations and the development of a plan to reduce debt to sustainable levels, and to improve the company’s liquidity.
Piers Marsden was appointed as chief restructuring officer and chairperson of the committee, and its other members include non-executive directors Jean Nel, Andile Sangqu, Graham Clark and chief financial officer Rob Aitken.
“Tongaat Hulett today informed shareholders that the company’s newly established restructuring committee will present the restructuring plan to the Tongaat board by 30 September 2022. The comprehensive restructuring plan seeks to improve liquidity levels, reduce debt to sustainable levels and provide clarity on a way forward for the company to all stakeholders,” the company said in a statement on Friday.
The sugar manufacturer said a longer-term financial solution was required for Tongaat Hulett’s audited annual financial statements to be finalised, largely dependent on the outcome of the restructuring plan.
Trading in shares to be suspended
“While every effort is being made to finalise the restructuring plan as soon as possible, it is clear that neither the Provisional 2022 Financial Statements nor the Audited 2022 Financial Statements will be finalised by 31 July 2022. As a longer-term financial solution is required for the results to be released, Tongaat has applied to the JSE to have trading in its shares voluntarily suspended,” the company further said.
A suspension would protect the interests of current and potential shareholders as the company engages with multiple parties on solutions to progress the restructuring.
The JSE issued a Stock Exchange News Service (SENS) announcement earlier on Friday confirming that it was considering the request for suspension received from the board and that it would communicate its decision as soon as possible.
“To allow sufficient time and resources to complete the restructuring plan, the company is in final negotiations with the South African lender group to replace the company’s seasonal overdraft facility with a larger short-term ‘borrowing base’ liquidity facility. The lender group remains supportive of Tongaat Hulett and we are currently engaging with them and other parties to provide liquidity, giving us additional time to work to progress a comprehensive restructuring solution,” Tongaat Hulett further stated.
The company said it was committed to open and transparent engagement with all its stakeholders, and to working to resolve the challenges that confront the business.
It went on to say that shareholders would be updated on developments and further announcements would be made as and when appropriate.
Gavin Hudson, CEO of Tongaat Hulett said: “We have generated further momentum in the restructuring process with a clear timeline and new resources to deliver the restructuring plan at the end of September. We are grateful to our employees who are focussed on producing sugar as efficiently as possible. This plan will be critical in addressing our liquidity needs, reducing our debt to more sustainable levels and providing our employees and stakeholders with much-needed clarity. In the meantime, we remain committed to our employees, suppliers, customers, and wider stakeholders.”
“Tongaat’s request made to the JSE for the voluntary suspension of trading in our shares is a purely procedural decision which would protect shareholders and stakeholders as we engage widely to progress our restructuring plans. By progressing a comprehensive restructuring solution, we are working to create a long-term future for the company, and the half a million people which depend on it across Southern Africa,.”
Tongaat Hulett’s share price has surged more than 80 percent since the sugar and property group announced late last month that a rights issue underwriting deal with controversial financier, Mauritius-based Magister, had been terminated.
On Tuesday, the share price was up a substantial 20.9 percent to R4.90, following an announcement by Tongaat that Artemis Investments, a shareholder that has been among some very vocal minority stakeholders in their opposition to Tongaat’s plans for a R5 billion rights issue, had acquired shares in Tongaat to now equal 10 percent of the share capital.
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