Staff Reporter|Published
Tongaat Hulett will be delisted from the Johannesburg Stock Exchange (JSE) on November 3, bringing an end to its listed status after more than seven decades as the embattled sugar producer continues efforts to secure its future.
The JSE announced the decision on Monday, October 12, citing prolonged non-compliance with its listing requirements and the absence of a realistic prospect of the company restoring compliance. Tongaat Hulett has confirmed that its adopted business rescue plan envisages its delisting.
The company’s shares were suspended from trading on July 20, 2022, after it failed to publish its annual financial results for the year ended March 31, 2022. It entered voluntary business rescue in October that year.
The business rescue plan adopted by creditors in January 2024 provided for the group to be recapitalised through a debt-for-equity conversion or, failing that, for its assets and operating businesses to be sold to the Vision Consortium as going concerns.
Shareholders did not approve the proposed equity subscription underpinning the debt-for-equity transaction in August 2024, leaving the alternative transaction under the adopted plan to be pursued.
However, a subsequent agreement between the business rescue practitioners, the Industrial Development Corporation (IDC) and Vision introduced a further restructuring route. The final outcome of the rescue process remains uncertain, with possible outcomes including a restructuring under the agreement, a sale of the group’s assets and businesses as going concerns, or a winding-up.
The delisting will not bring the business rescue proceedings to an end. Shareholders will retain their shares in an unlisted company, but the shares will no longer be tradable on the JSE or through its electronic settlement system.
No payment will be made to shareholders as a result of the delisting. Tongaat Hulett has also stated that no value is expected to accrue to shareholders when the business rescue process concludes and that they should not expect future distributions in respect of their shares.
The company’s financial crisis was preceded by accounting irregularities identified in a forensic investigation. Former executives and a former external auditor were charged in 2022 in connection with allegations relating to property transactions and financial reporting. The charges are allegations and do not, in themselves, establish guilt.
Tongaat Hulett’s business rescue process continues, with the IDC’s R2.5 billion post-commencement finance facility extended to November 30, 2026. Under the facility’s terms, outstanding amounts must be repaid or restructured on terms acceptable to the IDC before the business and assets can be transferred as a going concern.
The delisting removes Tongaat Hulett from the listed market but does not resolve the future of its operations. The outcome of the restructuring process remains significant for creditors, employees, sugar cane growers and other stakeholders whose interests are linked to the group and the wider sugar industry.
IOL Business