Tongaat Hulett’s liquidation hearing has been postponed after a deal was
reached between the sugar giant’s business rescue practitioners and the
Industrial Development Corporation (IDC).
This deal relates to the Post-Commencement Funding (PCF)
facility between the IDC, Tongaat and its business rescue practitioners.
A PCF facility is funding secured by a business rescue
practitioner for a company during or after business rescue proceedings.
On the morning of 16 April, the day Tongaat’s provisional
liquidation hearing started, the facility was extended to 30 June 2026 and
increased from R2.3 billion to R2.5 billion – R200 million (US$12.16 million).
Tongaat’s business rescue practitioners said this provides
the necessary liquidity to support the company’s ongoing operations pending the
finalisation of the transaction.
With this R200 million boost confirmed, the KwaZulu-Natal
High Court granted an adjournment of the provisional liquidation application.
The matter is now set to be heard on 17 and 18 June.
The adjournment was supported by Tongaat’s business rescue
practitioners, the IDC, the Vision Consortium and SA Canegrowers.
“Since the institution of the liquidation application on 12
February 2026, Tongaat has continued to operate under extremely challenging
conditions,” the business rescue practitioners said.
“That fact notwithstanding, employees have received their
salaries, growers’ cane payments, and critical off-crop maintenance work has
progressed to ensure operational readiness for the upcoming season.”
Tongaat’s business rescue practitioners originally applied
for provisional liquidation after concluding that there was no longer a
reasonable prospect of rescuing the sugar giant.
The practitioners explained that, despite the PCF’s
extension and increase, Tongaat is not out of the woods yet.
They said the PCF developments address the company’s
immediate short-term liquidity requirements.
However, to withdraw the liquidation application, the
practitioners would need to see a concrete and implementable transaction
capable of achieving the objectives of business rescue.
The practitioners previously said two requirements would
need to be satisfied before they could reasonably consider the withdrawal of
the liquidation application –
- Liquidity:
Binding, unconditional funding commitments to meet Tongaat’s liquidity
requirements - Implementability:
A concrete and implementable transaction capable of achieving the
objective of business rescue within a realistic timeframe
“In the absence of these two elements, the objective facts
remain that the adopted Business Rescue Plan remains unimplementable,” they
said.
On 16 April, they said the extension of the PCF and the
postponement of the liquidation hearing should allow the relevant parties
additional time to progress engagements in this regard.
“The business rescue practitioners will continue to
discharge their statutory duties in accordance with the Companies Act in the
best interests of all stakeholders,” they said. – Daily Investor