Competition Tribunal of South Africa gives nod to sale of Tongaat Hulett’s starch business

SOUTH AFRICA – The Competition Tribunal of South Africa has approved the acquisition of Tongaat Hulett’s Starch business by Barloworld subsidiary, KKL Group for R5.35billion (US$342.6m).

The agriculture and agri-processing company Tongaat Hulett stated that the decision was the third approval in the jurisdictions relevant to the transaction, with the Botswana Competition Commission and the Common Market for Eastern and Southern Africa (Comesa) Competition Commission having already approved the transaction without conditions.

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The final approval is awaited from the Indonesian Competition Commission, probably in the first week of August, reports IoL.

“This is good news and means we can focus on closing the final conditions relating to the deal,” Tongaat chief executive Gavin Hudson said.

“These involve obtaining the consent of our lenders, and the resolution of the MAC (material adverse change) event that Barloworld has called,” he said.

In May, Barloworld indicated it believed a material adverse change had occurred in relation to the sale of the starch business, but Tongaat has remained firm with the view that a MAC has not occurred.

The matter has been referred to an independent third party, Rothschild and Co South Africa to evaluate the transaction.

Hudson said the company was still committed to finalising the disposal of the business, one of a range of initiatives Tongaat Hulett has initiated as part of its broader business turnaround process.

“The successful execution of any of these transactions, or a combination of them, will ensure we can deliver on our strategic business partnerships; step-changing our transformation initiatives, protecting employee jobs and helping support the economies of the countries in which we operate,” he said.

In other related news, the Board of Tongaat Hulett Limited has appointed Ms Louisa Stephens as an independent non-executive director to the Company and as a member of the Remuneration and Human Resources committee and the Risk, Capital and Investment committee, with effect from 15 July 2020.

Ms Stephens’ career included roles at the National Empowerment Fund as fund manager, a former investment banker at Rand Merchant Bank.

She was also a General Manager of the Investment and Finance Divisions of Nozala Investments, where she was a transactor and managed the BEE Investment Holding company’s investment portfolio and entire finance and administration process of the group.

Louisa was also Chief Investment Officer of Circle Capital Ventures.

Ms Stephens’ impressive experience, qualifications and business acumen have seen her serve on the boards of directors of several prominent companies.

She served on the boards of African Bank Group, BAIC Automobile (South Africa) Proprietary Limited, Afgri Limited, South Oceans Holdings Limited and a member of the Fund Management Investment Committee of the National Empowerment Fund.

She is now a non-executive director at Multichoice Group Limited, Royal Bafokeng Platinum Limited and the Lead Independent at the Institute of Directors in Southern Africa NPC.

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