By Lloyd Phillips
It may be painstakingly slow, but there appears to be progress in finally transferring ownership of the beleaguered sugarcane growing and milling, animal food manufacturing and property developing giant Tongaat Hulett.
The latest milestone achieved by the Vision Parties – the preferred acquirer of Tongaat Hulett – is the support of the Competition Commission (CompCom).
“The commission has recommended that the Competition Tribunal (CompTrib) approves the proposed transaction whereby Vision intends to acquire Tongaat Hulett, with conditions,” said a CompCom statement.
“The commission is of the view that the proposed transaction is unlikely to substantially lessen or prevent competition in any market.”
The conditions Vision has accepted include having Tongaat Hulett incrementally expand its lands under sugarcane over the six years after the acquisition date. Furthermore, within five years Tongaat Hulett must begin procuring a target percentage of its sugarcane requirements from historically disadvantaged persons (HDPs).
“In addition, Vision will direct financial support to HDPs within Tongaat Hulett’s agriculture value chain, and establish broad-based trusts for the benefit of small-scale growers and employees respectively,” the CompCom saod.
“Further, Vision has set aside equity within Tongaat Hulett that will be made available to employees and small-scale farmers. Finally, Vision and Tongaat Hulett have agreed to a moratorium of three years on acquisition-specific retrenchments.”
The South African Canegrowers Association (SA Canegrowers) expressed the hope that if the CompTrib gives its approval, Vision and Tongaat Hulett will commit to “honouring the almost R526 million in outstanding obligations to the sugar industry”.
SA Canegrowers said that in May, the Durban high court confirmed the requirement that Tongaat Hulett pay these outstanding levies, which are required by law, to the South African Sugar Association on behalf of the sugar industry.
SA Canegrowers said contrary to legislation and the Sugar Industry Agreement, Tongaat Hulett suspended its payment of statutory levies during 2022 and 2023 when it went into voluntary business rescue.
“The overdue payments of these obligations are putting all sugarcane growers and many livelihoods in the sugar industry at risk.”
Although SA Canegrowers’ statement focused on Tongaat Hulett’s outstanding financial obligations to the national sugar industry, it also offered some praise.
“The Vision consortium’s commitment to procure sugarcane from small-scale growers as well as provide financial support for such growers will bring welcome stability,” said association chairperson Higgins Mdluli.
According to the CompCom, Vision comprises Guma Agri and Food Security Limited, Almoiz NA Holdings Limited, Remoggo (Mauritius) PPC and Terris AgriPro Limited.
Tongaat Hulett, its business rescue practitioners and Vision had not issued any statement at time of publication.
