Durban — Despite reservations by agricultural economist Dr Kobus Laubscher, business mogul Robert Gumede is poised to finally take over the embattled sugar giant, Tongaat Hulett Limited (THL), on Thursday (today).
Gumede, from Mpumalanga, through his Guma Agri has teamed up with Rute Moyo of Remoggo, Amre Youness of Terris Sugar and Nauman Khan of Almoiz and they were earlier this year chosen by creditors to take over the company in a bid to rescue it from shutting down.
The conglomerates formed a consortium in 2019 and called it Vision Investments. On Thursday (today), shareholders are expected to finally endorse Vision Investments through a vote.
In a long opinion piece, Laubscher cast doubt on Vision’s ability to rescue the embattled sugar giant, citing Vision’s failure to raise R8 billion owed to various banking institutions by Tongaat Hulett. He also insinuated that Gumede was a front for Moyo.
However, this was dismissed by Gumede as nonsense. In his direct response to the Daily News on Wednesday, Gumede said the insinuation was “utter nonsense” and they do not bother themselves with what is being said by monopoly money people.
Gumede said Vision Investments was led by major entrepreneurs with great reputations.
He was backed by a statement issued by Vision Investments which said on Thursday (today) the JSE-listed Tongaat Hulett will have a chance to move a step closer to a sustainable, better future as shareholders meet to vote on a debt-to-equity swop that will be a win-win solution for all in the bid to save the company.
Speaking on behalf of the consortium, Rob Bessinger said the shareholder vote is another important step towards THL coming out of business rescue after THL’s assets were originally placed in business rescue in October 2022 as a result of the effects of fraudulent activity at the company during the preceding years.
Bessinger said to improve the balance sheet of THL, Vision has proposed a debt-to-equity swop whereby R5 billion of the R8.6bn debt currently owing would be swopped for fresh equity being issued by THL to Vision.
He said the residual R3.6bn of debt still owing to Vision would be held as subordinated long-term debt in THL.
Since the placement of THL into business rescue in October 2022, a few key milestones have been achieved, Bessinger said.
“The first milestone was when the banks and Vision entered into a full and final debt purchase agreement ahead of the creditors meeting in January this year. The banks have been very supportive and facilitated Vision to save THL from liquidation by accepting the Vision offer to acquire all the banks’ debt in THL. The agreement between the banks and Vision is final and irreversible.
“To date, Vision has complied with the terms of its agreement with the banks.
“The second milestone was when the Vision Plan was approved at the meeting of all THL creditors in January of this year,” said Bessinger.
Laubscher’s opposition to Vision Investments’ takeover was also dismissed by the business rescue practitioners who were tasked with a rescue plan for Tongaat Hulett.
In a statement, the business rescue practitioners said: “It will be in the best interest of all THL stakeholders and to expedite the conclusion of the business rescue process and avoid the need for consideration of the alternative transaction contemplated in the approved plan, being the sale of the assets of THL.”
The sugar giant based in Durban, KwaZulu-Natal, experienced financial difficulties, owing banks and the South African Sugar Association billions of rand. It was subsequently placed under business rescue in 2022.
Earlier this year, Vision Investments was voted as a successful bidder after competitor RGS pulled out at the 11th hour.
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