Tongaat Hulett set to receive a R2bn injection from the IDC to halt liquidation and safeguard SA Sugar Industry and employment.
Image: File
A potential lifeline has emerged for Tongaat Hulett, as government-backed financial support and decisive intervention aim to steer the embattled sugar giant away from liquidation and towards recovery.
Minister of Trade and Industry Parks Tau revealed that the Industrial Development Corporation (IDC) has already injected more than R2 billion into the company, underscoring efforts to stabilise operations and protect the broader sugar economy.
Tau was responding to a parliamentary question from David Sikhosana of the Umkhonto weSizwe Party, who sought clarity on measures to prevent a collapse of the sugar cane industry and the potential loss of hundreds of thousands of jobs.
Highlighting the importance of intervention, Tau acknowledged the severity of the crisis but stressed the strategic role Tongaat Hulett plays in the national economy.
“The challenges facing Tongaat Hulett are of serious national concern, given the company’s central role in South Africa’s sugar cane industry and the extensive socio-economic impact across KwaZulu-Natal, Mpumalanga, and surrounding rural economies,” Tau said.
Since October 2022, the IDC has worked closely with business rescue practitioners, company management, lenders and other stakeholders to keep the company afloat and pursue a viable recovery path.
“The IDC has, since October 2022, worked consistently and in good faith with the Business Rescue Practitioners, Tongaat Hulett management, lenders, shareholders, and government stakeholders to support business continuity and pursue a viable, going concern outcome,” Tau said.
As part of this effort, the IDC has provided more than R2 billion in post-commencement funding to sustain operations during the business rescue process.
“The IDC provided significant post-commencement funding of more than R2 billion to support ongoing operations, the business rescue process, and the protection of jobs, growers, and the broader sugar value chain,” he said.
Although the rescue process has faced setbacks, including the failure to secure key sale agreements, decisive steps are now being taken to keep the company out of liquidation.
The Business Rescue Practitioners filed for provisional liquidation; however, Tau confirmed that the IDC has moved swiftly to halt this process.
“The IDC has written to the BRPs to withdraw its conversion application from business rescue to liquidation and to reinstate Tongaat Hulett into Business Rescue,” he said.
Beyond immediate intervention, the IDC is also working on sustainable long-term solutions aimed at enabling the company to exit business rescue successfully.
“Additionally, the IDC is actively developing sustainable solutions to allow the business to exit Business Rescue within a reasonable time frame, in the case where the BRPs withdraw the liquidation application,” Tau added.
Should liquidation proceedings continue, Tau said the IDC is prepared to oppose them legally to prevent collapse.
“In the event the BRPs refuse to withdraw the liquidation application, the IDC will oppose the provisional liquidation proceedings in order to prevent operational collapse and safeguard the broader sugar economy,” he said.
The minister emphasised that government remains committed to protecting jobs and the livelihoods tied to the sugar industry.
“Government remains fully seized with this matter, committed to preventing a systemic collapse of the sugar cane industry, and focused on securing a sustainable resolution that safeguards jobs, supports growers, and preserves the integrity of South Africa’s sugar value chain,” Tau said.
Tau added that government will continue monitoring developments and keep Parliament informed as efforts to stabilise Tongaat Hulett progress.
DAILY NEWS