SOUTH AFRICA – Embattled sugar processor Tongaat Hulett’s shares plunged by over 63.66%, on Monday Morning, 3 February as it resumed trading on the on local bourse after a 7-month suspension
The shares plunged 63.66 percent, wiping more than R430 million (US$29m) off its stock. The stock settled after tumbling 67percent in early trade before closing the day at R4.80.
Analysts attributed the sharp decline to the repricing of the stock hurt by last year’s accounting scandal.
Tongaat asked the bourse to suspend its shares in June last year, arguing that its results for the year to end March 2018 could not be relied upon as they had been inflated by up to R4.5billion (US$304.1m).
The group said the discrepancies would have a material impact on its half-year financials to end September 2018 and full year results to March 2019.
At the time Tongaat shares exchanged hands at R13.21.
Last week, the group released its results for the six months to end September, showing that a headline loss of R314m (US$21.2m) from the restated headline R354m (US$23.9m) last year.
The group also released the long-awaited PricewaterhouseCoopers investigation which found that 10 former executives, including its former chief executive Peter Staude, played a role in inflating assets and profits.
Tongaat’s shares have fallen 90percent in the last 52 weeks. But chief executive Gavin Hudson has put a brave face on the future prospects of the company.
Hudson has said that he remained confident about the business as the group was moving strongly in the right direction.
“Tongaat is generating decent cash flow with strong margins and we are on track to meet our first-year target of improving cash flow by R1bn (US$67.5m). We have also met and exceeded our first debt reduction target, which was agreed with our lenders. We are at an advanced stage of assessing assets, which may be suitable for disposal,” Hudson said.