Efforts to save struggling sugar producer Tongaat Hulett are still underway, even as its possible liquidation has been temporarily put on hold.
The pause follows a government-backed funding agreement that will help the company continue operations until mid-year. The KwaZulu-Natal High Court has adjourned the provisional liquidation case to June 17 and 18, giving stakeholders more time to work on a rescue plan, Zululand Observer reported.
The funding support comes through an agreement between the Industrial Development Corporation, Tongaat Hulett and business rescue practitioners. The facility has been extended to June 30 and increased from R2.3 billion to R2.5 billion, offering short-term financial relief.
However, officials say this funding alone is not enough to secure the company’s future. A clear and workable plan is still needed to pull the firm out of business rescue and avoid liquidation.
Tongaat Hulett has been under business rescue since October 2022. Earlier this year, it filed for provisional liquidation, citing a lack of realistic chances of recovery. Despite ongoing financial strain, the company has continued to pay workers, settle dues to cane growers and carry out maintenance work ahead of the next crushing season.
Industry groups have raised concerns about the wider impact if the company collapses. The South African Canegrowers Association, which represents about 18,000 growers, has warned that the shutdown of Tongaat’s mills could severely affect rural livelihoods.
Association chairperson Higgins Mdluli said many farmers depend solely on Tongaat’s mills to process their sugarcane. A sudden closure could make farming unviable and lead to large-scale job losses.
The association has joined the IDC and Trade and Industry Minister Parks Tau in opposing liquidation in court, stressing that keeping the mills running is crucial for the sector.
Tongaat Hulett is also the country’s only standalone white sugar refiner, and its closure could force food and beverage companies to rely entirely on imports.
Meanwhile, tentative dates have been set for the reopening of key mills, including Felixton on May 6, Maidstone on May 27 and Amatikulu on May 28, offering some hope to growers awaiting the new season.
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Source : Chinimandi
