South African sugar giant Tongaat Hulett requests extension of business plan publication 

SOUTH AFRICA – Tongaat Hulett, an agriculture and agri-processing company, focusing on the complementary feedstocks of sugarcane and maize, has asked for a time extension for the publication of their business rescue plan to end of June.

The sugar company has reportedly been in the midst of a financial crisis, battling crippling debt which threatened the company’s survival.

Their shares crashed a while back in the wake of an accounting scandal believed to be South Africa’s second largest.

The company hired Gavin Hudson as CEO to spearhead a turnaround of the group, a mandate which included a comprehensive review of its finances.

According to the company, they intended to leverage Hudson’s longevity and expertise in administrative positions to strategize on reducing the debt burden and turning around governance and operational processes.

Hudson however resigned before accomplishing the task prompting the appointment of  Dan Marokane as acting CEO to help come up with a business rescue plan and help bring the company back on its feet.

This recent request to extend the deadline for the publication of the business rescue plan follows a previous postponement of the publication by the company’s business rescue practitioners (BRPs) two months ago.

Among the reasons for the request for the extension was that there are currently two milestones that are part of the rescue plan scheduled for June.

One of the milestones mentioned is that the company is in the process of sourcing for a strategic equity partner. There are several possible potential restructuring permutations which could flow from this process and the company hopes to have more clarity on the matter by mid-June.

The second factor is that the current funding arrangements include agreements for a standstill until June 30^th by which the BRPs have to abide.

The accomplishment of these milestones along with ongoing discussions and negotiations with stakeholders on the actual development of the rescue plan is going to need additional time as it is a complex process that requires a greater degree of detail, according to the BRPs.

Due to too many loose ends, the BRPs are of the opinion that publishing this plan at this time is not ideal as it will contain speculation and will not have enough information needed by creditors to make informed decisions regarding doing business with the company.

They intend to release a business plan that is meaningful and detailed for the stakeholders to vote on.

They also assure all the stakeholders involved that the delay in the publication of the plan will not have any implications on the other operations of the company.

“A later release date of the plan will not impact the length or costs of the business rescue, with the same work streams taking place. Larger business rescue plans in very successful business rescues typically take months to release, so this is not unusual,” read a statement from the BRPs.

For all the latest food industry news from Africa and the World, subscribe to our NEWSLETTER, follow us on Twitter and LinkedIn, like us on Facebook and subscribe to our YouTube channel.