Tongaat Hulett collapse looms

Labour federation Cosatu has joined the chorus of dismay over the imminent liquidation of sugar giant Tongaat Hullet after its business rescuers said there was no longer any prospect of successfully implementing their plan, raising the prospect of thousands of job losses. “This is a blow we simply cannot afford in an economy that is battling — barely growing at 1%. This will affect farms, mills and other businesses in the value chain,” Cosatu national spokesperson Matthew Parks told theMail & Guardian.

“This will see thousands of scarce jobs lost at the company. The impact will be especially felt hard in Mpumalanga and KwaZulu-Natal. It will have a devastating impact upon thousands of emerging farmers in these two provinces.

South Africa’s leading sugar producerwas placed under business rescue in October 2022, after losing around R12 billion in value and being delisted from the JSE because of an alleged R3.5bn accounting fraud by former chief executive Peter Staude and a group of managers and accounts. The business rescue process hit the estimated 25 000 small-scale farmers who supplied cane to the company. A business rescue plan proposed by the Vision Group was approved and adopted by the requisite majority of creditors in January 2024, including the lender group — financial institutions that provided secured debt financing to the company and whose claims were central to the process.

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In anoticeon 12 February, the business rescue practitioners said the adopted rescue plan was premised on the acquisition by Vision of the lender group claims and either a debt to equity exchange or failing which, an assets transaction. As a result of shareholders not supporting the debt for equity transaction, the rescue plan required implementation of transactions contemplating the conclusion and implementation of sale agreements in which Vision would acquire the company’s operating assets and as its investments in Zimbabwe, Mozambique and Botswana. “Affected persons are hereby advised that the sale agreements, which gave effect to the Vision acquisition lapsed on 7 February 2026, with Vision declining to grant an unconditional extension thereof,” the rescuers said.

“”As a result, the [business rescue] plan has become unimplementable. The business rescue practitioners have accordingly concluded … that a reasonable prospect of rescue no longer exists and have … filed for an application to court for the provisional liquidation of the company.” Cosatu’s Parks called for measures to help farmers transition to other crops “as well as lowering costs and boosting competitiveness of the sector”. “It is critical that workers, communities as well as SMMEs (small, medium and micro enterprises) at risk be protected and provided with alternative jobs and opportunities.” Tongaat’s liquidation would affect smaller industries downstream which were dependent on the sugar giant for revenue, economist Sifiso Skenjana said.

“Tongaat Hullet is a classic case study of anchor businesses in small towns, with the business having named itself after the area. The impact of all this is going to be felt downstream, because you have the supplier side, businesses doing logistics, packaging and a whole lot of other products,” said Skenjana, the managing director of ESG Analytics.

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