The business rescue practitioners (BRPs) of Tongaat Hulett have applied to the KZN High Court for an order to terminate rescue proceedings and enter provisional liquidation, reports the North Coast Courier.

Announcing the news on Thursday (February 12), the BRPs said they had exhausted all reasonable avenues for business rescue and that the sale agreements with strategic partner, Vision, had lapsed.

Tongaat Hulett entered business rescue in October 2022 after historic financial misstatements and governance failures destroyed around R12b in shareholder value and severely weakened the company’s balance sheet.

The rescue process has since depended on extensive post‑commencement funding provided by the Industrial Development Corporation (IDC).

The business rescue plan – proposed by Vision and approved by Tongaat Hulett’s creditors in January 2024 – contained three critical conditions for successful implementation:

• The refinancing of the IDC’s R2.3b post-commencement funding facility into a structure assumed by Vision.
• A payment of R517m into a South African Sugar Association (SASA) escrow account, pending the outcome of legal proceedings.
• Provision of R75m for distribution to concurrent creditors.

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According to the BRPs, Vision acquired the lender group claims in May 2025, but sought further funding from the IDC for the SASA obligation and PCF refinancing.

“Despite repeated engagements, Vision and the IDC were unable to conclude binding funding arrangements,” said the BRPs.

“During this period, Vision introduced new demands and conditions that were never contemplated in, nor capable of accommodation, under the adopted Business Rescue Plan.”

The BRPs said they sought an extension on the sale agreement deadline of February 7, which Vision said they would accept, assuming the addition of further material conditions.

The BRPs said that combined with liquidity issues as a result of a sharp downturn in domestic sugar sales – driven by unprecedented volumes of imported sugar – the additional conditions made the plan unimplementable.

“The company has subsequently received a letter of demand from Vision for approximately R11.7b, stated to be immediately due and payable,” said the group.

“This claim has profound implications for Tongaat Hulett’s solvency and constitutes a material and immediate threat to the company’s continued existence.”

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The BRPs said liquidation is the only practical option left available to them given the circumstances.

If granted, a provisional liquidator appointed by the Master of the High Court will take control of the winding‑up process, including asset protection, engagement with creditors, and the administration of claims. The BRPs have committed to full co-operation to ensure a smooth transition.

The application relates only to Tongaat Hulett Limited in South Africa. The company’s businesses in Zimbabwe, Mozambique, and Botswana continue to operate normally under their respective structures.

“The BRPs along with the Tongaat senior leadership team recognise that this development brings significant uncertainty and distress for employees, creditors, suppliers and surrounding communities and remain committed to providing clear, timely updates as the process unfolds,” said the group.

SA Canegrowers reaction:

Higgins Mdluli, chairman of SA Canegrowers, said Tongaat’s liquidation would affect all of South Africa’s 27 000 small-scale and 1 100 large-scale growers.

“Ensuring continuity of milling operations at Tongaat and protecting grower income must be an urgent priority for the government and the business rescue practitioners of Tongaat, irrespective of the eventual ownership outcome,” said Mdluli.

SA Canegrowers note that if liquidation proceeds, the entire industry will face immediate non-payment for cane, levies and other legislated funding requirements. Liquidation may also mean that Tongaat will be prevented from selling their existing stock of refined sugar to manufacturers and retailers.

“The underlying value of the company rests in functional, operating assets – mills that are running, cane that is being processed, and a supply of refined sugar that flows to the market,” said Dr Thomas Funke, CEO of SA Canegrowers.

“If this operational continuity is not secured, the consequences will extend far beyond one company. The entire South African sugar value chain, starting with growers and flowing through to workers, transporters and downstream industries, will be severely destabilised.”