A binding agreement between Tongaat Hulett’s Business Rescue Practitioners, the Industrial Development Corporation (IDC) and the Vision Group has paved the way for the embattled sugar company to continue operating while implementing its approved business rescue plan.
By Maile Matsimela, digital editor at African Farming
Announced on 17 June, the agreement is expected to preserve an estimated 250 000 jobs across the sugar industry value chain while creating a pathway for Tongaat Hulett to eventually exit business rescue.
The deal follows months of uncertainty, including the filing of a liquidation application in the High Court in Durban. However, the parties have opted to work together to keep the business operating and protect the value it provides to employees, growers, suppliers, lenders and communities that depend on the sugar industry across Southern Africa.
Also read: Tongaat Hulett crisis: Sugarcane growers ask help to save SA’s oldest sugar giant from liquidation
Liquidation application to be withdrawn
As part of the agreement, the Business Rescue Practitioners will take steps to withdraw the liquidation application. The IDC will extend its post-commencement finance support until the end of September 2026, allowing Tongaat Hulett to continue trading while the transaction is implemented. The parties have also agreed that the IDC’s post-commencement finance will be restructured into equity as part of the broader transaction framework aimed at creating a more sustainable capital structure.
Vision, meanwhile, will provide funding to settle creditor claims, including Tongaat Hulett’s obligations to the South African Sugar Association (SASA), in support of the substantial implementation of the approved business rescue plan.
The agreement also provides for new sale agreements covering Tongaat Hulett’s South African operations as well as its interests in subsidiaries in Zimbabwe, Botswana and Mozambique.
Support for growers and suppliers
Vision said the agreement reflects its long-term commitment to the South African and regional sugar industry. According to the company, it intends to invest in the recovery of Tongaat Hulett’s operations while supporting growers and suppliers who form the backbone of the value chain. The objective is to safeguard livelihoods that depend on a stable and sustainable sugar business.
The parties have committed to working together to complete the transaction as quickly as possible, with the shared goal of stabilising the business, supporting the broader sugar value chain and positioning operations for long-term recovery.
Also read: ‘Massive relief’ as IDC’s R200 million guarantees start to Tongaat Hulett sugarcane milling season
IDC highlights developmental mandate
Mmakgoshi Lekhethe, Chief Executive Officer of the IDC, said the agreement aligns with the corporation’s developmental mandate. “This agreement reflects the IDC’s commitment to supporting an outcome that safeguards productive capacity, protects livelihoods across the sugar value chain and creates a credible platform for long-term recovery,” she said.
“Our role is aligned to our developmental mandate: to preserve industrial capability, support jobs and enable sustainable economic participation in sectors that are important to South Africa and the region.”
Vision calls agreement a milestone
Speaking on behalf of Vision, Robert Gumede described the agreement as a major milestone for both the sugar industry and black business participation. He said he was heartened by the final negotiations and agreement to save the sugar industry, 250 000 jobs and growers’ investments. “Black business is stepping up to save a 134-year-old sugar group operating in the SADC region,” he said.
Gumede added that Vision looks forward to working closely with SASA, growers, labour unions, customers and suppliers as the recovery process unfolds.
Also read: ‘Jobs bloodbath’ warning as major players fight Tongaat Hulett liquidation crisis
