- Tongaat Hulett has two critical deadlines in April: The liquidation hearing and the opening of its mills for the harvest season.
- But the company’s bank accounts are frozen after its business rescue practitioners filed for liquidation.
- The livelihoods of 27,000 small-scale and 1,100 large-scale growers and their workers are at stake.
The clock is ticking for embattled sugar giant Tongaat Hulett and the hundreds of thousands of people who depend on it. The company has two critical deadlines looming in April: the opening of its mills, and a court case to determine whether the company is placed in provisional liquidation.
The winding up application, brought by business rescue practitioners (BRPs), will be argued in the Durban High Court on 16 and 17 April.
Unless the matter is resolved by consent, judgment might be reserved for weeks or even months.
In the meantime, sugarcane – which must be processed soon after harvesting – needs to be delivered to Tongaat’s mills. But most of the company’s bank accounts have been frozen because the liquidation application.
Thomas Funke, CEO of SA Canegrowers, which represents 27,000 small-scale and 1,100 large-scale growers, told GroundUp: “Although there is still hope that a negotiated solution may be found to avoid liquidation completely, we are also hoping to ensure that if a liquidation does proceed, it would at least be a funded liquidation which would allow operations to continue.”
As of this moment, Tongaat Hulett’s mills and refinery are in an operational condition, he said. “The mills were being prepared for the 2025/26 season when the application for provisional liquidation was lodged by the business rescue practitioners.”
“All parties involved understand what is at stake should Tongaat Hulett face an unfunded liquidation or even temporary stoppage of work: the majority of South Africa’s small- and large-scale sugarcane growers will immediately lose market access, leading to devastating income and job losses in rural KwaZulu-Natal.
“With a little over a month to go until the liquidation hearing, everything is being done to avert such an outcome,” said Funke.
The liquidation application is being opposed by several parties, including the canegrowers, Minister of Trade and Industry Parks Tau and the Industrial Development Corporation (IDC), which provided R2.3-billion in post commencement funding.
Questions have been raised about the conduct of the BRPs, including the fees charged over their three-year appointment, and how the Vision Group could scupper the preferred rescue plan, triggering the present crisis.
The Vision Group acquired the loans held by the lender group, making it the controlling creditor and effectively giving it the voting power to approve its own rescue plan.
Late last year, the BRPs approached the IDC for a further R600-million to tide the company over until the Vision deal was concluded. But the IDC said Vision should contribute at least R200-million.
Vision refused. The rescue plan lapsed and the company entered the current crisis.
Some creditors have questioned the legality of the lender group transaction with Vision. They are demanding a full investigation, amid allegations that Vision may not have paid for the loans. They also believe that the transaction had not been legally concluded when the business rescue plan was voted on in January 2024.
In their latest affidavit, however, the BRPs maintained they acted lawfully throughout the process.
They said while they are aware of the potentially devastating consequences of liquidation, their options are limited. They added that although the IDC expressed “speculative optimism”, it had not committed to providing more funding.
“The objective facts are that the adopted plan has failed, sale agreements have lapsed, the conditions have not been fulfilled.”
“Vision has refused IDC’s proposals and has issued a demand for the payment of R11.7-billion [the lender group claim],” BRP Gerhard Albertyn said in his latest affidavit.
“The IDC portraying itself as the proverbial ‘white knight’, is nothing more than smoke and mirrors. At the time of deposing to this affidavit, there is no funding that will enable the company to conduct business, even in business rescue, beyond the end of this month.”
Albertyn said the BRPs had considered the consequences of liquidation. But, he said, there were no reasonable prospects of rescue.
The BRPs blame Vision for their failure, which they say undermined the rescue plan by introducing new conditions, such as reforms to the sugar industry.
Vision, they noted, is neither opposing nor supporting the liquidation application. Yet as the controlling creditor, its co-operation was essential to any restructuring if the company were to continue in business rescue.
“Only a few hours prior to me deposing to this affidavit … Vision continues to frustrate genuine ongoing efforts by the BRPs to responsibly manage Tongaat’s affairs,” Albertyn said.
Responding to the minister’s affidavit, Albertyn said Tau’s intervention would have been “more constructive and certainly welcome” had it come before the liquidation application was launched.
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Highway
A British man on safari walks into a bar far out in the reaches of a game reserve in Southern Africa, he stays at the bar for a while shooting the shit with the bartender and drinking like a fish, he offer to buy the barkeep a round and since no one else is within 2km of their small oasis of liquor the barkeep obliges. The englishman goes off to the bathroom to have a good old go at the porcelain, he\’s back and ready for a few more whiskeys. He\’s just sat down when suddenly in the distance he hears a scream. He looks over his shoulder and dismisses it as nothing, he turns to the barkeep and orders a drink, takes a sip and hears the scream again. He looks at the barkeep who just shrugs it off. A minute or two later he and the barman hear it again and go outside to take a look. They see a lone figure running towards them screaming, he spots them and lets out a cry, RUN!!!!! HE\”S COMING!!!!!
The barkeep and the Englishman both look at the terrified bedraggled sight before them, and try to calm him down, but he\’s completely inconsolable. They give him water and finally manage to get a word out of him but he struggles free from their grasp and run away screaming.
A few minutes later the same thing happens with a whole group of men running in and screaming, he\’s coming, he\’s coming the barkeep grabs hold of one of the men as he tries to sprint past the bar and tries to get information out of him, again no response other than terrified gibberish.
The barkeep and his customer are starting to get worried, they start to pack up before another group of horrified natives run up to the bar most of them flee but one tries to hide behind the bar, the barkeep pulls out a shotgun and points it at the terrified man\’s face, finally managing to coax some words out of him. \”He\’s coming for us, Vernon Koekemoer is coming for us, we have to hide!!! We have to get out of here.\” He gets up and tries to run but the barkeep grabs him, feeling trapped in a panic he grabs the barkeeps shotgun and blows his own head off. The Englishman and the barkeep look at each other starting to really panic now.
They look out of the window and off in the distance they see a tornado coming towards the bar, at the bottom of the tornado they see the hugest beast of a man they have ever seen, as he gets closer they spot that he is riding a rhinocerous and using a crocodile as a riding whip, with each smack of the crocodile across the back of the rhino the louder is screams and the faster it runs, the tornado following it getting ever larger.
The 2 look at each other and start to fortify their position, they\’ve got a gun and they\’re waaay to drunk to run, so they start piling bar stool and tables and anything they can get their hands on to make sure they\’ll be safe when he arrives. They\’re not gonna make it, they can see the man slowing down his rhino, by now the crocodile is nothing but reptile paste on the bruised rump of the half dead rhino, the rhino drops down dead from exhaustion and crashes to the ground right outside the bar the tornado loses it\’s last breath in a cloud of dust as the huge man crashes his way through the make shift barricade and charges up towards the bar where the 2 men have taken shelter, he grabs a bottle of the hardest liquor on the shelf and down the entire litre in 1 gulp, he peers over the bar sobbing and sees the 2 defenders cowering down behind the crates of beer, they look up at the mans\’ face and he stares at them with a look of complete and utter hopelessness, he stares at them for a half second and half screams, half sobs, \”Oh my god what are you still doing here!!! WE HAVE TO GET OUT OF HERE NOW!!!! Vernon Koekemoer is coming!!!!\”
Hen Skittle
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