Tongaat Hulett's rescue or ruin? the damning quiet of a company in freefall

IOL News

11-05-2025

Tongaat Hulett refinery in KwaZulu-Natal.
Image: Supplied
It has now been more than two years since Tongaat Hulett, South Africa's 130-year-old sugar giant, entered business rescue. What was supposed to be a bold restructuring has instead devolved into a slow, painful erosion of shareholder rights, creditor value, and public confidence.
As of today, 10 May 2025, the Vision consortium—heralded as the saviour of Tongaat—has failed to deliver even a cent of the promised funding. The April 30 deadline, the fifth to be missed, has passed with silence. No explanation. No accountability. No money.
And yet, somehow, the show goes on.
The Illusion of Progress
On 16 April, a SENS announcement confirmed that the Zimbabwean competition commission had approved the sale of assets to Vision. According to the Business Rescue Practitioners (BRPs), this was the 'last required competition authority sign-off,' supposedly marking progress.
But let's call this what it really is: window dressing. The BRPs and Vision are pushing forward with asset sales not as part of a thriving business rescue, but as a fallback mechanism—the 'Debt Set Off' clause—that bypasses shareholder approval, strips the company of assets, and readies it for liquidation.
Let that sink in: the rescue of Tongaat is being implemented through liquidation-by-stealth.
Legal storms brewing
This brazen shift has not gone unchallenged. Two legal processes are now before the courts:
RGS Group's Part B in the Durban High Court seeks to set aside the adopted plan, citing Vision's failure to meet its contractual obligation to acquire the full R8.5 billion in lender claims before any debt-for-equity conversion or asset sale could proceed. That was a clear condition precedent—not a suggestion—and its violation renders the plan unimplementable under both the Companies Act and established precedent.
A Shareholder Interdict submitted in the Johannesburg High Court seeks a declaratory order that the plan unlawfully alters shareholder rights and, by failing to hold a shareholder vote as required under Section 152(3)(c), was never lawfully adopted. In effect, the sale of assets currently underway may well be void ab initio—illegal from the outset.
Tongaat Hulett itself confirmed in its 4 April BR update that while Part A of RGS's challenge was dismissed on urgency grounds, Part B remains active, and shareholders have delivered their own affidavit, which should have been publicly posted on THL's website. If either legal action succeeds, Vision's grip on Tongaat could collapse overnight.
The myth of shareholder consent
Let us be clear: shareholders never voted for this outcome.
Despite the BRPs' insistence that the business rescue plan did not "alter shareholder rights," the facts say otherwise. The plan proposed issuing 4.86 billion shares to Vision, diluting existing shareholders to just 2.7%. In real terms, the dilution destroyed shareholder value by over 97%—a fact confirmed in the shareholder court application.
Under Section 152(3)(c) of the Companies Act, any such alteration requires shareholder approval. Yet the BRPs, led by Trevor Murgatroyd, Pieter van den Steen and Gerhard Albertyn, chose not to convene a vote. Worse still, when shareholders rejected the Section 41(3) resolution to approve the share issue in August 2024, the BRPs simply pivoted to the asset sale model without missing a beat.
This isn't corporate rescue. It's corporate coup. Asset Stripping in Real Time
SENS notices confirm that the BRPs have signed four major Business Sale Agreements: Tongaat's entire South African operations have been sold to Vision Sugar SA.
Its Zimbabwean business , Triangle Sugar, is being handed over.
Its Botswana stake has been transferred to ensure a controlling 50.1% interest.
And in perhaps the most controversial deal, Mozambique's sugar operations
—including Acucareira de Moçambique and Tongaat Hulett Açucar Lda—are being disposed of.
Yet to date, shareholders have not seen the sale agreements. The applicants in the shareholder interdict explicitly state they are unaware whether these deals are subject to any suspensive conditions, or whether they've already been partially executed.
So we must ask: who authorised the sale of billions in strategic assets without a lawfully adopted plan? And more urgently—what happens if the courts rule that the plan was invalid from the outset? The sound of silence
Standard Bank, Vision's transaction advisor, guarantor and lead lender, remains disturbingly quiet. It was their 'letter of funds' in December 2023 that supposedly confirmed Vision's liquidity. Yet four deadlines have now passed. Did the funds ever exist? Were they warehoused elsewhere? Has Standard Bank misled the market?
The same bank now stands to benefit from Vision's completion of the deal it enabled and guaranteed. If this isn't a case study in conflicted interests, then nothing is. What the law demands
Sections 134, 140 and 152 of the Companies Act exist precisely to prevent this kind of abuse.
They require: That all property disposals occur only under a lawfully adopted business rescue plan.
That BRPs must implement only such a plan—not their own version.
That shareholder rights, if altered,
must
be approved in a vote.
All of these protections have been cast aside. In their place is a rescue plan implemented in name only—a plan that no longer exists in its originally approved form, but continues to be actioned as if it does.
This Is No Longer Business Rescue
Let's not sugarcoat it: Tongaat Hulett is being dismantled.
And this is happening under the noses of regulators, bankers, employees, and the public. If the courts do not intervene—and fast—South Africa may soon witness one of its oldest listed companies being dismembered in broad daylight, shielded by legal technicalities and institutional apathy.
The Verdict:
The shareholders have spoken. The courts are being called. The facts are plain. Vision has not paid. The plan was not lawfully adopted. And Tongaat Hulett—along with its thousands of employees and legacy—deserves better than this. This isn't rescue. This is the slow-motion execution of a national asset.
Roy Nzero is a small scale farmer in Jozini, KZN with a masters in agricultural science.
** The views expressed do not necessarily reflect the views of IOL or Independent Media.
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