In a crucial step towards its survival, Tongaat Hulett has announced the sale of its Mozambique operations to Vision, a consortium led by South African billionaire Robert Gumede. The deal, part of the company’s business rescue plan, aims to alleviate its crippling debt and pave the way for a potential resurgence.
The agreement, signed on Monday, will see Vision acquire all of Tongaat Hulett’s shares in three Mozambican entities, including an 85% stake in Tongaat Hulett Açucareira de Moçambique. The Mozambique government holds the remaining shares. The final purchase price will be determined by an independent valuation, with the amount settled against Tongaat’s lender group claims.
This move follows Vision’s earlier acquisition of Tongaat Hulett’s R8.5 billion debt from lenders, a significant portion of which will be converted into equity. This restructuring is central to Vision’s strategy to revitalize the struggling sugar giant.
The appointment of former Illovo CEO Gavin Dalgleish as Vision’s CEO, effective April, coincides with the expected completion of the asset transfer. His experience is seen as crucial in steering Tongaat Hulett towards recovery.
The company’s financial woes stem from a 2022 accounting scandal, where a PwC investigation uncovered fraudulent practices by senior executives, leading to inflated profits and unsustainable debt. This forced Tongaat Hulett into business rescue, a process now being challenged by RGS, a rival bidder from Mozambique. RGS alleges that the business rescue practitioners did not act in the best interests of Tongaat and its stakeholders by selecting Vision.
However, Vision maintains that its consortium, comprising Terris, Remoggo, Guma, and Pakistan-based Almoiz Industries, is best equipped to drive Tongaat Hulett’s transformation. Almoiz Industries, in particular, brings expertise in modernizing agro-processing businesses and expanding into new markets.
The sale of the Mozambique assets represents a pivotal moment in Tongaat Hulett’s fight for survival. The outcome of the ongoing legal challenge and the success of Vision’s restructuring efforts will determine the company’s future.
