Tongaat Hulett’s amended business rescue plan is again delayed as creditors wait to vote on the sale of the company.
The new date for publication of the amended plan, which will include further details on acquisition, is set for no later than October 31.
It was originally slated for September after Tongaat Hulett’s business rescue practitioners (BRPs) announced Tanzanian company, Kagera Sugar, as the preferred takeover bidder.
Creditors agreed to extend the date of publication, the fourth such extension requested by the BRPs, inclusive of the initial business rescue plan published on May 31.
The announcement of the preferred bidder brought relative stability to the ongoing rescue process, although there has been some conjecture around Kagera’s suitability for the takeover given they were not previously operational in South Africa.
It is understood they remain the first choice of the BRPs, but more details will be released with the amended plan.
Elsewhere in the sugar industry, stakeholders have called for government intervention to help stabilise the industry until such point it is able to rebound by itself.
The South African Canegrowers Association called on further consultations to be had before the ‘sugar tax’ is increased in 2025.
Originally introduced in 2018, the tax was meant to reduce obesity and reliance on sugars, but SA Canegrowers contend the main impact it has had is to hamstring small-scale sugarcane farmers.
“The negative impact of the tax on the sugar industry is plain to see. It caused tens of thousands of job losses in the first year of its implementation alone and cost the country more than R2-billion,” said SA Canegrowers CEO, Dr Thomas Funke.
“Subsequent research from the Bureau for Food and Agricultural Policy showed that simply maintaining the tax would cause a reduction in hectares under cane over the next 10 years. Increasing the tax will therefore have catastrophic effects resulting in thousands more job losses and less cane being farmed in poor, rural areas where poverty and unemployment are already at alarming levels.”
Responding to the issues in the sugar industry in February, finance minister Enoch Godongwana agreed to suspend the increase until 2025 in which time consultations would be had.
Funke said no discussions had since developed and that SA Canegrowers would be making written submissions on the recently published Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill which cited the 2025 increase.
In closing their engagement, SA Canegrowers called on government to support the ‘Home Sweet Home’ initiative, which promotes the purchase of homegrown sugar.
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