Tongaat Hulett Zimbabwe operations will not be affected by recent developments at its South African entity which announced the commencement of a voluntary business rescue for two of its entities, the company has announced.
The sugar producing company on Thursday announced that it will be entering a voluntary business rescue process (BRP), after its board found the company to be in financial distress.
In a statement, the company’s Head of Industry and Corporate Affairs Dr. Dahlia Garwe said Botswana, Mozambique and Zimbabwe sugar operations will be exempt from the rescue process as they remain financially sound.
“The international operations of Tongaat Hulett in Zimbabwe (as well as in Botswana and Mozambique) are funded independently from the South African operations and are not entering business rescue, continuing to trade in the ordinary course.
“The action in the South African business is a result of it remaining unable to service its residual debt, the majority of which (around 87%) is carried by the cash flows of the South African sugar operation, the property business and operational support fees received from the non-South African sugar operations. This is despite the good progress on the turnaround strategy and debt reduction initiatives over the last few years,” said Dr. Garwe.
Tongaat Hulett chief executive officer, Gavin Hudson also confirmed that operations in other countries are not financially troubled.
“We are writing to you at the first moment we are able to, after informing shareholders today by way of a Johannesburg Stock Exchange announcement that the Board has commenced voluntary business rescue proceedings for Tongaat Hulett Limited and Tongaat Development Pty Limited. These are the South African operations only. Tongaat Hulett’s Botswana, Mozambique and Zimbabwe sugar operations are not financially distressed and therefore will currently continue trading in the ordinary course,” Hudson said.
