Tongaat Hulett suffers authorized blow in dispute over R900m debt

Tongaat and Gledhow Sugar Firm – a KwaZulu-Natal-based sugar agency – owe the Sasa R1.5 billion in industry-related levies.

The enterprise rescue practitioners (BRPs) for financially troubled Tongaat Hulett say they’re contemplating their subsequent steps within the ongoing dispute over the sugar producer’s legal responsibility to settle {industry} levies owed to the South African Sugar Affiliation (Sasa).

Judgment was handed down on the KwaZulu-Natal native division of the Durban Excessive Courtroom on Monday, affirming that the corporate was certainly liable to settle a debt of roughly R900 million with the {industry} physique and that the rescue course of doesn’t – as Tongaat’s BRPs have beforehand argued – take priority over the {industry}.

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In an preliminary response to questions probing the rescuer’s subsequent steps following Monday’s judgment, BRPs – Metis Strategic Advisors – stated, “We’re finding out the judgment and its implications intimately and can contemplate what steps to take thereafter”.

Tongaat and Gledhow Sugar Firm – a KwaZulu-Natal-based sugar agency – owe the Sasa R1.5 billion in industry-related levies.

Tongaat Hulett entered the rescue course of in 2022 after discovering itself in monetary bother, whereas Gledhow started the method in March 2023. The 2 corporations have been at odds with the {industry} since failing to settle their money owed with the Sasa on the finish of March this 12 months.

Tongaat’s BRPs had beforehand challenged their obligation to the {industry}, arguing that the rescue course of took priority over its preparations. Nonetheless, the most recent developments out of the courts counsel in any other case.

ALSO READ: Tongaat Hulett enterprise rescue to have dire penalties on sugarcane growers

“What this implies virtually is that the enterprise rescue practitioners (BRPs) at Tongaat Hulett and Gledhow can not droop the duty to pay greater than R1.5 billion that was attributable to Sasa on the finish of March 2023, which was not paid on the time because of the BRP’s competition that the enterprise rescue course of took priority over {industry} preparations,” the SA Canegrowers Affiliation stated in an announcement on Tuesday.

Trade response

The Durban Excessive Courtroom dismissed Tongaat’s enterprise rescue practitioners’ bid with prices.

“The substantive foundation for the dismissal of the appliance is a welcome consequence for the continued sustainability of the sugar {industry}. This judgment brings the {industry} one step nearer to a decision of this crucial {industry} matter. It doesn’t, nonetheless, put the matter to mattress,” the affiliation added.

ALSO READ: Former Tongaat Hulett execs seem in court docket for R2.4 billion corruption case

SA Canegrowers had beforehand argued that the 2 corporations’ non-payment would lead to dire penalties for your entire {industry}, affecting the livelihoods of small-scale growers probably the most.

SA Canegrowers additionally famous that it’s going to examine the judgment and its implications for the {industry}. Nonetheless, it additionally expressed hopes that Tongaat’s BRPs will revise their rescue plans to accommodate this newest improvement.

“It’s our hope that the plans can be revised to accommodate the fee of the {industry} obligations upheld by the excessive court docket. Failure to take action will needlessly delay what has already been a protracted and expensive course of for your entire {industry} and can proceed to place 1000’s of livelihoods in danger.”

ALSO READ: Former Tongaat Hulett executives charged for fraud of R3,5 billion

Tongaat’s BRPs launched their enterprise rescue plans on 1 December, noting they’d be assembly with collectors this week. They put ahead proposals from The RGS Group – a Mozambican conglomerate – and from a grouping known as the Imaginative and prescient Events – which incorporates Terris Sugar, Guma, Remoggo and Almoiz.

These plans now hold within the stability because the BRPs attempt to discover a means ahead.

This text was republished from Moneyweb. Learn the unique right here

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