The Vision Consortium’s bid received overwhelming support from lenders in a decisive move to rescue Tongaat Hulett, effectively pulling Southern Africa’s largest sugar producer out of business rescue. The pivotal decision brings an end to a period of uncertainty that loomed over the more than 100-year-old company and the thousands of livelihoods directly and indirectly dependent on it in KwaZulu-Natal.

Tongaat Hulett, placed in business rescue in October 2022 due to alleged financial misconduct by key former executives and management struggles during the Covid pandemic, faced the threat of liquidation. The repercussions of such a move would have been severe, leading to significant socio-economic consequences for the region.

During the creditors’ meeting, business rescue practitioner Trevor Murgatroyd expressed relief at the overwhelming vote in favor of the Vision Consortium, calling it a “great milestone.” Despite acknowledging the challenges faced during the business rescue process, Murgatroyd emphasized that there was still “hard work ahead” for the company.

The Vision Consortium, led by businessman Robert Gumede, founder of IT firm Gijima Technologies, plans to acquire approximately R7.7 billion of lender claims against Tongaat. Out of this amount, around R4.1 billion will be converted to equity, maintaining the company’s listing and allowing existing shareholders to retain a minority stake.

The consortium also aims to fulfill all outstanding payments owed to the South African Sugar Association, aligning with industry regulatory functions. Had the lenders not accepted the Vision Group’s bid, Tongaat Hulett would have faced liquidation, risking widespread job losses across southern Africa, particularly in KwaZulu-Natal.

Questions were raised at the meeting by parties affiliated with the Mozambique-based RGS Group, which withdrew a rival bid a day before the scheduled creditors meeting. Allegations were made that business rescue practitioners favored the Vision Group, prompting queries about any security arrangements between Vision and the Industrial Development Corporation (IDC).

The business rescue practitioners clarified that they could not confirm any agreement between Vision and the IDC but stated that no security arrangement existed between Tongaat Hulett and the IDC.

The Vision Consortium, in its bid, assured the continuation of Tongaat’s operations, negotiations for post-commencement funding from the IDC throughout the business rescue process, and a commitment to ongoing business improvement. While the latter may involve some degree of cost base rationalization, potential employee retrenchments are not currently contemplated.

With the approval of the Vision Consortium’s bid, Tongaat Hulett now looks forward to a period of stability and the opportunity to navigate the challenges ahead under new ownership.