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Robert Gumede’s Vision consortium takes ownership of Tongaat Hulett

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Robert Gumede’s Vision consortium takes ownership of Tongaat Hulett

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Business Reporter

Businessman Robert Gumede’s Vision consortium’s plan to save ailing sugar group Tongaat Hulett has been approved by creditors, ending the drawn-out business rescue process which has been described as “challenging” by one of the BRP practitioners.

Vision, which includes investors from Zimbabwe and Pakistan, will take over the business after buying Tongaat’s R8bn debt through a partial debt-for-equity swap arrangement.  

“The process has been difficult and challenging. Certainly for us as business rescue practitioners [it] has been a milestone,” said Trevor Murgatroyd from Metis Strategic Advisors.

He said the approval and adoption of the plan was not the end of the road. 

“There’s a lot of hard work ahead, and no doubt further challenges. With the continued support of employees, suppliers, the IDC (Industrial Development Corporation) and Vision, we will work together to achieve substantial implementation of the now approved and adopted business rescue plan as efficiently and as quickly as possible.”

The IDC has provided R2.3bn to the operations of Tongaat since late 2022.

Murgatroyd said: “Substantial implementation will be a new beginning for a company that has been in existence for more than 100 years and has a substantial impact on the economy of KZN and South Africa.”

About 25,000 people, mostly in KwaZulu-Natal, rely on Tongaat for their livelihoods. The company also has operations in Botswana, Mozambique and Zimbabwe.

In its plan, Vision said Tongaat would remain listed and that there was an opportunity for new jobs to be created as the business grew under its leadership.

Vision spokesperson Rob Bessinger said the consortium, made up of entrepreneurial families led by Gumede and Zimbabwean Rute Moyo, international businessmen Amre Youness and Nauman Khan, “are particularly elated with the outcome after a protracted bidding process that was mired in controversy up to this day.” 

Tongaat is one of the key strategic assets in the Sadc region, employing about 40,000 people and working with more than 250,000 small-scale cane growers as well as numerous players across the sugar cane industry, “all of whom are the biggest winners with this result”. 

Vision conducted a deep dive due-diligence in all countries — South Africa, Zimbabwe, Botswana and Mozambique — where Tongaat is the leading sugar company and one of the largest employers.

“Having been involved in this transaction since late 2020, we always believed that in the right hands, Tongaat can return to being a great business. We have a team that has a sustainable plan to turn around, grow and diversify the group back into relevance,” said Bessinger. 

Vision acknowledged the role played by the BRPs, Tongaat’s employees and the IDC during the controversial rescue process. Bessinger said the IDC will hopefully continue playing a role in providing Tongaat with the “oxygen” it requires “at this crucial time”.

“Without them, it would have been a different story,” he said. – TimesLIVE

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