Tongaat Hulett Limited, Tongaat Hulett Sugar South Africa and Voermol Feeds have requested a time extension for the publication of the business rescue plan to June 30.
The extension was requested for several reasons.
Firstly, discussions and negotiations are ongoing with various stakeholders regarding the development of the business rescue plan. As this is a complex process requiring a greater degree of detail, additional time is required to finalise the business rescue plan.
Also, owing to the complexity and various possible outcomes, the business rescue practitioners (BRPs) are of the view that publishing a plan based on currently available information will result in a plan containing speculation and insufficient detail to enable creditors to make an informed decision.
The BRPs believe that a meaningful and detailed business rescue plan for stakeholders to vote on is essential.
Moreover, two key milestones that form part of the business rescue process end in June. Aligning the business rescue plan publication with these matters is said to be more efficient.
The milestones are, firstly, the process of sourcing a strategic equity partner. There are several possible potential restructuring permutations which could flow from this process. This process is under way and clarity on the chosen path and partner(s) will be established in mid-June.
Secondly, the current funding arrangements include agreements for a standstill until June 30. The BRPs have to abide by these. This means that certain transactions cannot be actioned to allow sufficient time to finalise the details of an overall restructuring.
Creditors are required to vote on the extension of the date by the evening of February 24.
“It is important to note that the publication of a rescue plan is only one step in a business rescue process. The other workstreams continue regardless of when the plan is published. An extension to the publication of the plan has no material impact on the ongoing operational aspects of the company.
“The company continues to operate, with the completion of the off-crop maintenance progressing well. The operations are on track to commence in the 2023/24 sugar season. A later release date of the plan will not impact the length or costs of a business rescue, with the same work streams taking place. Larger business rescue plans in very successful business rescues typically take months to release, so this is not unusual,” the BRPs comment.
Meanwhile, Tongaat further informed shareholders that the company and Deloitte have concluded an agreement in relation to claims by the company against Deloitte. These claims arose from and relate to Deloitte's appointment as auditor of the company for the financial years ending March 31, 2012, to March 31, 2018.
Deloitte will pay R260-million to the company without admission of liability.
After taking advice in this regard, the BRPs say a settlement on these terms is in the best interests of the company.