Tongaat Hulett liquidation hearing adjourned, but viable transaction needed, say BRPs
The KwaZulu-Natal High Court on April 16 granted an adjournment of the provisional liquidation application of distressed agri-business Tongaat Hulett, with the matter set down for hearing on June 17 and 18, the business rescue practitioners (BRPs) say.
This is after industrial finance agency the Industrial Development Corporation (IDC), Tongaat Hulett and the BRPs agreed that an existing post-commencement funding (PCF) facility would be extended to June 30 and increased to R2.5-billion from R2.3-billion.
This provides the necessary liquidity to support the company’s ongoing operations, pending the finalisation of the transaction to be implemented.
However, while the PCF developments address the company’s immediate short-term liquidity requirements, the BRPs have previously indicated that a further requirement for any withdrawal of the liquidation application would be the existence of a concrete and implementable transaction capable of achieving the objectives of business rescue.
The postponement will allow parties additional time to progress engagements in this regard, they say.
Since the liquidation application was filed on February 12, Tongaat Hulett has continued to operate under extremely challenging conditions. Despite this, employees have received their salaries, growers cane payments and critical off-crop maintenance work has progressed to ensure operational readiness for the upcoming season.
The BRPs originally applied for provisional liquidation after concluding, on objective grounds, that there was no longer a reasonable prospect of rescuing the company, as required under the Companies Act.
The adjournment was supported by the BRPs, IDC, the Vision Consortium and the South African Cane Growers Association.
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