Tongaat Hulett’s (THL) creditors’ meeting that was scheduled for today, where one of two potential bidders are vying to take southern Africa’s biggest sugar producer out of business rescue, was postponed by a court order yesterday.
THL’s business rescue practitioners (BRPs) said yesterday evening in a notice to affected parties that KwaZulu-Natal High Court Judge Rashid Vahed had ruled yesterday the THL’s meeting of lenders that was to have been held today, be adjourned, “to consider and, if appropriate, approve the company’s amended plan (business rescue plan)… to a date no later than Thursday 11 January 2024”.
In addition, the court ordered that the business rescue plans published by the BRPs on November 29 in their unamended form shall not be voted on.
The postponement will undoubtedly be a blow to the BRPs, who had finalised business rescue plans for two potential bidders, the Vision Consortium from South Africa and Mozambique-based RSG Group Holdings. The judgment indicates that the business rescue plans may have to be rewritten at different terms.
Yesterday’s court ruling followed two urgent applications to prevent the creditors’ meeting from taking place, one by RCL Foods, Sugar & Milling and the other by the Sugar Association of South Africa, both of which had argued that THL should have continued to pay statutory industry levies during the business rescue process, a notion the BRPs did not agree with. Tongaat owes about R1.1 billion in these payments.
The court earlier this week ruled against an application by Tongaat to not have to pay the levies, which then immediately set in motion yesterday’s urgent interdicts to have the creditors meeting postponed.
In a response to the court earlier this week, Tongaat’s BRPs said they could not postpone the creditors’ meeting because the R2.3bn interim funding provided to the group by the Industrial Development Corporation could not be extended, but reports yesterday suggested the state-backed funder had given Tongaat a reprieve.
BUSINESS REPORT