Group of cane growers mulls bid for Tongaat assets | Business
- A consortium of cane growers that provides Tongaat Hulett has expressed curiosity in buying the property of the embattled sugar producer.
- No monetary phrases have been disclosed.
- Tongaat entered enterprise rescue in late October.
- For extra monetary tales, go to the News24 Enterprise entrance web page.
A consortium of cane growers that provides Tongaat Hulett has expressed curiosity in buying the property of the embattled sugar producer. They consider their supply is without doubt one of the few viable choices to save lots of 11 000 small-scale growers and 20 000 cane grower jobs.
The expression of curiosity is being made to Tongaat’s enterprise rescue practitioners on behalf of growers delivering greater than 5 million tonnes of sugar to Tongaat. The proposal for the acquisition of property consists of the working mills at Maidstone, Amatikulu and Felixton, the mothballed manufacturing facility at Darnall, the Hulett’s Refinery, Voermal animal feeds and all related manufacturers and logos.
Tongaat Hulett entered enterprise rescue in late October after lenders opted to not approve the sugar producer’s restructuring plan, which was geared toward fixing an extra debt pile in SA of greater than R6 billion. Because it appeared to finish its milling and crushing season, the surplus debt was inflicting a money crunch on the agency and left tons of of growers unpaid. The agency’s enterprise rescue practitioners and cane growers have lately agreed on phrases for funds coming to cane growers on the finish of November.
The enterprise rescue practioners – Metis Strategic Advisors – mentioned on Wednesday the enterprise rescue plan can be introduced on the finish of January, when the market can be up to date intimately on the enterprise rescue course of.
The consortium, provisionally named NewCo, mentioned on Wednesday agreements would should be “signed expeditiously” to allow upkeep to be accomplished in time for the 2023/24 season.
It added that funding preparations can be concluded after binding letters of intent to finance NewCo have been signed, and the monetary mannequin totally investigated and accepted. In response to questions from News24, the consortium mentioned it could not give a determine on the worth of the deal.
“This may largely be decided by negotiations with the enterprise rescue practitioners at Tongaat Hulett which have but to start,” mentioned spokesperson Simon Cleasby.
The supply to affix the consortium can be prolonged to the greater than 11 000 small-scale growers and 400 industrial and land reform growers that offer the Tongaat Hulett mills, in addition to quite a few strategic companions, it mentioned.
“What number of of those events select to take part within the consortium will rely partially on the deal reached with the enterprise rescue practitioners at Tongaat Hulett. That is why we wish to see negotiations get beneath means as quickly as attainable, in order that these essential particulars can finalised timeously,” Cleasby mentioned.
“The potential inclusion of strategic companions in NewCo who’ve entry to finance and acceptable technical expertise can even then be actively thought-about. Discussions are beneath approach to safe 2023/24 working capital necessities by commerce finance preparations,” its assertion learn.
The consortium added that the with full assist of the grower neighborhood, it was optimistic the state, banks and others would work with them to make sure the absolute best final result for the trade.
“The proposal is underpinned by a imaginative and prescient of an inclusive, collective funding within the property of NewCo, which can be held by all Tongaat Hulett-supplying growers in a single funding automobile with a majority shareholding for supplying black growers.
“This may be sure that NewCo meets the trade’s transformation goals in the long run. As small-scale growers are typically unable to securitise land, alternate funding strategies will should be explored so as to obtain this imaginative and prescient.”
Tongaat has mentioned it contributes R11 billion to SA’s GDP, whereas about 500 000 livelihoods are depending on the sugar producer throughout southern Africa.