Tongaat Hulett faces liquidation: Vision Group's plan to rescue the sugar giant

The Vision Group, the secured lender to Tongaat Hulett Limited (THL), has pledged to salvage the business by securing control over the assets that had been pledged as security and protecting the integrity of the company.

In a statement, the group said the filing for provisional liquidation provides an opportunity to begin implementing its five-year turnaround plan, which focuses on operational stability and returning the sugar mills to sustainable profitability.

The group, which is the lead secured lender with substantial exposure to THL, said the liquidation filing follows the failure of the Business Rescue process to effectively stabilise THL’s operations and maximise the turnaround. This has left liquidation as the necessary legal mechanism to allow secured creditors like Vision to take direct control of the assets and initiate a comprehensive recovery plan for the South African sugar business.

In a statement, the group committed to working with key stakeholders to find a lasting solution that saves the 220,000 jobs in KwaZulu-Natal (KZN) alone.

According to Vision, a total collapse of THL’s South African operations would be catastrophic for the regional economy, particularly for the 250,000 jobs supported by the cane-growing sector. Of these, 220,000 are based in KwaZulu-Natal and 30,000 in Mpumalanga, alongside the 2,600 direct employees at Tongaat South Africa.

“Vision’s quest is to save these jobs and ensure that the 16,000 cane grower enterprises that form the backbone of the industry are not left more vulnerable. We remain dedicated to working with all relevant parties to protect regional food security and transform THL into a successful pan-African agri-business. Vision will engage with regulators, employees, labour unions, cane growers, the South African Sugar Association, suppliers, clients, traditional leaders in KZN and the liquidators to be appointed to reduce uncertainty as quickly as possible and to get the mills ready for the new season,” it said.

This comes as the business rescue practitioners (BRPs) approached the Pietermaritzburg High Court to apply for the provisional liquidation of the group, citing the collapse of the Business Rescue Plan approved by creditors and shareholders last year after sale agreements with Vision expired.

The plan had proposed converting debt into equity, with an asset sale as an alternative if that step did not succeed. The company entered business rescue in October 2022 after financial irregularities and governance failures weakened its credibility and ability to secure funding.

Vision said on Friday that since the approval of the Vision BR Plan over two years ago, it had invested billions of rands to acquire the Lender Group’s claims, assisted management in turning around THSA plants to become the best-performing entity in the industry, sought new clients, assisted in the recruitment of key leadership — sometimes at its own cost — and engaged government through the Minister of the Department of Trade, Industry and Competition (DTIC) for industry reforms aimed at saving jobs and the sugar industry.

“Despite these best efforts, with the failure of the BR Plan, the BRPs, led by Trevor Murgatroyd, had to act in the best interests of the creditors. While the legal action has led to provisional liquidation, this process provides the most transparent path for government and other key stakeholders to engage in a structured rehabilitation of the assets without the BRPs and their advisors, who were appointed in October 2022. Vision’s objective and commitment remain focused on saving jobs and livelihoods in South Africa,” the group said.

It said that although it had been working on acquiring THL for the last three years of business rescue and remains steadfast in its commitment to the survival and long-term viability of Tongaat Hulett Limited (THL), the BRPs’ filing for liquidation is a disappointing outcome that unfortunately introduces more uncertainty into an already fragile regional sugar ecosystem that is reeling from delayed industry reforms, particularly tariffs.

“As the lead secured lender with substantial exposure to THL, under the proposed provisional liquidation, Vision will now focus its attention on securing control over the assets that had been pledged as security and protecting the integrity of the business, its loyal workforce, its extensive network of growers and suppliers, and the communities that have hosted the business for over 130 years,” it said.

Meanwhile, the South African Farmers Development Association (SAFDA) has appealed for restraint and unity during this period of uncertainty. It has assured growers that urgent discussions are underway with the relevant ministers and key stakeholders to explore all possible interventions to prevent adverse outcomes should the provisional liquidation process proceed to a point of no return.

“At this critical stage, SAFDA is engaging with government, industry and sector leaders to explore options and solutions for the crisis we face. We call for calm among our growers and the public at large. No challenge is insurmountable when stakeholders are working together,” SAFDA’s Executive Chairman, Dr Siyabonga Madlala, said.

BUSINESS REPORT