Tongaat Hulett is officially shutting down, with the Business Rescue Practitioners (BRPs) having exhausted all possible avenues to save the company.
The BRPs applied to the KwaZulu-Natal Division of the High Court for an order to commence the company’s business rescue proceedings and to place Tongaat into provisional liquidation.
The BRPs said that they had exhausted all reasonable endeavours to save the sugar giant founded in 1892.
This decision comes after the Business Rescue Plan is no longer implementable due to the lapse of the Sale Agreements with Vision.
Tongaat Hulett’s roots in South Africa date back to the 1850s-1870s. The formal incorporation of its predecessor companies, Sir J L Hulett and Sons and the Tongaat Sugar Company, occurred in 1892.
Tongaat entered business rescue in October 2022 following major accounting irregularities, financial misstatements and governance failures under former senior management.
Roughly R12 billion in shareholder value was destroyed, with the balance sheet, credibility and access to funding all being massively impacted.
Since their appointment, the BRPs have been managing the fallout, but have received critical funding from the Industrial Development Corporation (IDC).
The Business Rescue Plan, which was proposed by Vision and was approved by creditors in January 2024, was premised on a debt-to-equity exchange, failing which, an asset sale transaction.
With shareholders not supporting the debt-to-equity option, the plan required implementing transactions that would have Vision acquire Tongaat’s operating assets in South Africa, as well as make investments in Zimbabwe, Mozambique, and Botswana.
The plan had three critical conditions:
- Refinancing of the Industrial Development Corporation’s (IDC) post-commencement funding (PCF) facility of R2.3 billion into a structure assumed by Vision;
- Funding of an escrow account in the amount of R517 million in respect of the South African Sugar Association (SASA), pending the outcome of legal proceedings; and
- Provision of R75 million for distribution to concurrent creditors.
After Vision acquired the Lender Group claims in May 2025, the implementation of the Business Rescue Plan depended on refinancing the PCF facility and satisfying the SASA escrow amount.
Vision sought funding from the IDC to fulfil these obligations, with the process remaining ongoing for several months.
Vision and the IDC could not conclude binding funding arrangements, with Tongaat accusing Vision of introducing new demands and conditions that were not under the adopted Business Rescue plan.
“These included funding requirements beyond the financing of the IDC PCF facility and the SASA escrow amount,” it said.
“These demands materially complicated and delayed discussions between Vision and the IDC as well as the implementation of the Plan at a time when Tongaat’s liquidity position was under severe pressure.”
R11.7 billion demanded
Given that the Sale Agreements were approaching expiry, the IDC and its advisers were actively finalising feedback on funding proposals, with the BRPs requesting a short extension.
“Vision considered the request and indicated that it was prepared to grant an extension, subject to the imposition of new, material conditions,” said Tongaat.
“The BRPs determined that these conditions were not acceptable, as their fulfilment would have run counter to the agreed methodology for implementing the approved Business Rescue Plan.”
It said that these conditions exposed it to significant commercial risk and would place it in breach of its contractual undertakings to third parties.
It added that the broader market conditions also worsened, including a massive decline in domestic sugar sales, as cheap imported sugar entered the market in record volumes.
Amid the refusal to extend the closing date, the Sale of Business Agreements lapsed on 7 February 2026, making the Business Rescue Plan unimplementable.
The company has thus received a letter of demand from Vision for approximately R11.7 billion, which is stated to be immediately due and payable.
“This claim has profound implications for Tongaat’s solvency and constitutes a material and immediate threat to the company’s continued existence,” it said.
With this, the BRPs concluded that there is no longer a reasonable prospect of implementing the adopted Business Rescue Plan or saving Tongaat as a going concern.
Should the provisional liquidation order be given by the High Court, a provisional liquidator will be appointed, who will assume responsibility for overseeing the winding-up process.
While the development impacts Tongaat Hulett Limited in South Africa, it will not affect the company’s ongoing operations in Zimbabwe, Mozambique, or Botswana, which continue to trade.
Following the announcement, Vision said that the decision to file for liquidation was deeply disappointing, which creates more uncertainty for an already fragile sugar industry.
It noted that it is still deeply committed to the survival and long-term viability of Tongaat.
“As the lead secured lender with a substantial exposure to Tongaat, under the proposed provisional liquidation, Vision will now focus its attention on securing control over the assets that had been pledged as security,” it said.
Vision warned that the collapse of Tongaat’s local operations would be disastrous for the regional economy, especially the 250,000 jobs supported by the cane-growing sector.
This article has been updated with comment from Vision.
