Tongaat Hulett’s creditors have decided to push back the deadline by which they must determine whether to approve the business rescue plan until the end of September, when further information regarding the identities of the prospective or final owners of the company will be available.
The vote is now been slated for 30 September.
The embattled sugar producer owed over R 11 billion to various creditors before it started selling some of its assets as part of repayment.
Tongaat Hulett controls Hippo Valley and Triangle sugar estates in Zimbabwe with the estates contributing the bulk of the group’ sugar output.
However, the group has on several times made reassurances that its Zimbabwe operations will not be affected by its decision to go into business rescue over debts.
The business rescue practitioners (BRPs) of Tongaat and subsidiaries Voermol Feeds and Tongaat Hulett Sugar South Africa convened a meeting of creditors on June 14, and voted unanimously in favour of the BRPs amending the business rescue plans to take into consideration recent development and to delay the voting on the plans.
The creditors in March initially approved an extension of the publication of Tongaat’s business rescue plan, as well as that of the subsidiaries, until the end of May.
Tongaat says 85% of the total claims of creditors of Tongaat, 94% for Voermol and 78% for Tongaat Hulett Sugar, voted on these motions.
Last year Tongaat CEO Gavin Hudson said Tongaat Hulett’s Botswana, Mozambique and Zimbabwe sugar operations were not financially distressed and therefore would continue trading in the ordinary course.
The group said 87% of its leftover debt was carried by the cashflows of the South African sugar operations, the property business and dividends and operational support fees received from its non-South African sugar operations.
Last year Tongaat shareholders had approved an offer from Zimbabwean businessman Hamis Rudland to rescue the company by underwriting a R4 billion rights offer. However, this failed to take place after strong resistance from some shareholders leading to the nullity of the vote by South African authorities over concerns around Hamish’s close relations with controversial brother Simon who is accused of smuggling tobacco into South Africa.
