Tongaat Hulett Limited has applied for provisional liquidation after acquisition talks with the Vision consortium collapsed, a development industry leaders warn could severely destabilise South Africa’s sugar sector.
The company’s joint business rescue practitioners (BRPs) approached the High Court of South Africa after concluding that the adopted business rescue plan could no longer be implemented. Sale agreements with Vision lapsed on 7 February, effectively ending efforts to rescue the embattled sugar producer.
Tongaat entered business rescue in October 2022 following accounting irregularities and governance failures that wiped out an estimated R12 billion in shareholder value. A rescue plan approved by creditors in January 2024 envisaged Vision acquiring the group’s South African operations as well as investments in Zimbabwe, Mozambique and Botswana.
However, three major funding hurdles proved insurmountable: refinancing the Industrial Development Corporation’s R2.3 billion post-commencement facility, securing R517 million for the South African Sugar Association escrow account, and raising R75 million for concurrent creditors.
Funding Talks Collapse
Despite prolonged negotiations, Vision and the IDC failed to finalise binding funding arrangements. The BRPs stated that Vision introduced new conditions that fell outside the scope of the approved rescue plan and posed significant commercial risk.
The company’s financial position has been further strained by record volumes of low-cost imported sugar, which have eroded domestic sales and weakened cash flow.
Industry Warns of Systemic Impact
SA Canegrowers has cautioned that liquidation could trigger widespread disruption across the sugar value chain. CEO Dr Thomas Funke said the company’s value lies in its operational assets, warning that without continuity, the entire sector could face severe destabilisation.
Tongaat operates three of South Africa’s 12 remaining sugar mills and is the country’s only white sugar refiner, supplying key downstream industries including beverage and confectionery manufacturers. Its closure would directly affect approximately 27,000 small-scale and 1,100 large-scale growers, particularly in KwaZulu-Natal and Mpumalanga.
Broader Sector Under Pressure
The potential liquidation comes amid mounting pressures on the industry, including rising sugar imports and the ongoing Health Promotion Levy. Industry representatives warn that losing three mills in the current environment could deal a devastating blow to rural economies and national sugar production capacity.
Compounding the crisis, Vision has issued a letter of demand for approximately R11.7 billion — a development the BRPs say poses an immediate threat to Tongaat’s solvency.
If the court grants provisional liquidation, a liquidator will be appointed to manage the winding-up process and engage creditors. The application applies only to Tongaat Hulett Limited’s South African entity, while operations in Zimbabwe, Mozambique and Botswana continue trading independently.
Industry stakeholders are now urging urgent intervention to preserve milling capacity and protect growers as uncertainty deepens across the sector.
