Tongaat Hulett BRPs withdraw liquidation application as key funding and transaction milestones achieved

The Durban High Court earlier today granted the joint Business Rescue Practitioners (BRPs) of Tongaat Hulett Limited leave to withdraw the company's provisional liquidation application, following recent substantial progress between Vision and the Industrial Development Corporation (IDC) towards the implementation of the adopted Business Rescue Plan.

This includes the extension of the IDC Post-Commencement Funding (PCF) facility and the conclusion of a Heads of Agreement between the IDC, Vision and THL regulating, inter alia, the implementation of the adopted Business Rescue Plan.

As previously communicated, two fundamental requirements needed to be fulfilled for the BRPs to be placed into a position to reasonably consider withdrawing the application:

Liquidity : the securing of binding and unconditional funding commitments sufficient to support Tongaat's ongoing operations; and Implementability : the conclusion of a concrete and implementable transaction capable of achieving the objectives of the adopted Vision Business Rescue Plan.

Significant progress has now been made in advancing both requirements.

Firstly, the IDC has agreed to extend Tongaat Hulett’s PCF facility to September 2026, providing continued liquidity to support the company's operations while implementation of the business rescue transaction proceeds.

Secondly, the IDC, Vision and THL have concluded a binding Heads of Agreement regulating the implementation of the transaction as contemplated in the adopted Business Rescue Plan. This includes arrangements relating to the refinancing of the PCF facility, the treatment of the South African Sugar Association (SASA) obligation, the concurrent creditor distribution and the conclusion of new sale agreements.

The BRPs are accordingly satisfied that sufficient progress has been made to justify the withdrawal of the liquidation application, and for the implementation of the adopted Business Rescue Plan to proceed. The BRPs are relieved and deeply grateful that they are no longer required to pursue the liquidation application, an outcome they, and all stakeholders, have worked to avoid. The liquidation application was launched as a last resort by the BRPs in compliance with their statutory obligations and the withdrawal thereof is a significant milestone for everyone who depends on Tongaat Hulett and the sugar value chain.

The BRPs have consistently recognised the dire consequences that liquidation would have for employees, growers, suppliers, creditors and the broader communities that depend on Tongaat Hulett and the sugar value chain. The decision to apply for liquidation was, as set out above, taken only after the BRPs concluded – on objective grounds, and in accordance and compliance with their statutory obligations – that the adopted Business Rescue Plan could no longer be implemented.

The BRPs will continue to work with all stakeholders to ensure the urgent implementation of the transaction and remain focused on achieving the best possible outcome for employees, growers, creditors and the broader industry.

However, while the withdrawal of the liquidation application and the extension of the PCF are positive developments, they do not resolve the underlying structural challenges facing the local sugar industry, including the growing influx of cheap imported sugar into the South African market. Unless these challenges are urgently addressed, they will continue to pose a material risk not only to Tongaat Hulett’s recovery, but to the long-term sustainability of the broader industry.

South Africa is currently experiencing record-high levels of imports, with an estimated 111 696 tons of deep-sea sugar imported or anticipated in the first three months of the current season alone. This represents almost 50% of the total imports recorded during the entire 2025/26 season. Should this trend continue, imports could reach approximately 450 000 tons this season. Similar import levels in 2018 contributed to significant job losses and the closure of two sugar mills.

Tongaat Hulett looks forward to continuing to engage the DTIC and ITAC in establishing an effective regulatory environment. This is a fast-unfolding emergency that demands decisive action. If a South African sugar industry is to survive in the short term and thrive in the long term, imports must be curtailed immediately and a conducive local trading environment fostered. The gains secured through the rescue process will be eroded without it, at direct cost to jobs, grower livelihoods and the sustainability of the broader industry.