Tongaat Hulett demands R450m from some of its former administrators
- SA Canegrowers says its members have agreed to payment terms from Tongaat business rescue practitioners who will provide payments for sugar delivered in October.
- Most growers have already received payment for cane delivered in September, with the agency saying cane deliveries will resume when overdue payments are made.
- SA Canegrowers has agreed that larger producers will receive installment payments while smaller ones will be paid in full, while also waiving interest due on overdue funds.
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Representative body SA Canegrowers says its members have agreed to payment terms proposed by Tongaat Hulett business rescue practitioners which will ensure that commercial producers receive payments which fall due at the end of November, while the company continues to receive sugar cane.
Payments due to small growers at the end of November 2022 for sugarcane delivered in October will be paid in full, while appropriate terms have been agreed for staged payments to commercial growers, the group said in a statement on Wednesday.
Most commercial growers have already received payment for cane delivered in September, due at the end of October, while there has also been an agreement to waive claims for interest due on delayed funds. Producers had demanded payment before any resumption of supply from Tongaat Hulett.
READ | Tongaat crisis: Small farmers receive cash for September, but 300 large producers remain unpaid
“Once outstanding October payments are made, producers will resume deliveries to Felixton, Maidstone and Amatikulu mills, allowing Tongaat Hulett to resume operations at its mills and refinery, and generate cash flow again. “said SA Canegrowers Chairman Andrew Russell. in a report.
“But the industry crisis is far from over. It remains to be seen whether Tongaat Hulett will be able to secure the necessary funding to complete the off-harvest maintenance needed to keep its factories running next season.
Tongaat Hulett entered the corporate bailout in late October after lenders opted not to approve the sugar producer’s restructuring plan, which aimed to resolve excess debt in South Africa of more than 6 billion rand. Excess debt was causing a cash crunch in the business even as it sought to complete its milling and crushing season.
READ | Tongaat Hulett enters business bailout as lenders run out of patience
Practitioners said on Tuesday they had asked lenders to allow an extension of around two months for the release of their business plan, seeking to deliver it by the end of January, while saying talks on subsequent post-launch funding continued. A response from lenders, which include most of SA’s major banks, is expected by Friday.
Russell said on Wednesday there was always a risk that Tongaat might not emerge from the business bailout, which would again plunge the industry into crisis.
“It therefore remains essential that key stakeholders, including government and lenders, work with industry to ensure the success of the business rescue process. This is why SA Canegrowers continues to implore the Minister for Trade, Industry and Competition, Ebrahim Patel, and Minister of Agriculture, Agrarian Reform and Rural Development, Thoko Didiza, to meet with industry stakeholders to address this situation.”
“Tongaat Hulett’s demise would undo years of work under the sugarcane value chain master plan, undoing efforts to protect the local market from cheap sugar imports and protect the one million means livelihoods that depend on the sugar industry,” Russell said.