Sugar company Tongaat Hulett’s business rescue practitioners have received confirmation that the current post-commencement finance (PCF) facility has been extended to June 30.
This facilitates the payment of salaries and the start of the 2023/24 sugar season.
Following the confirmation of this extension, the publication date for the business rescue plan was also extended to May 31.
This follows the announcement on February 28, wherein the company advised that the date for the publication of the plan had been extended to March 31.
The extension will allow for the plan to contain more detailed information relating to a transaction and structure that creditors will be asked to vote on. Tongaat said discussions and negotiations were ongoing with various stakeholders.
Meanwhile, the current strategic equity partner process is also expected to result in final binding offers by May 26.
On March 9, Tongaat advised that recent heavy rains and flooding caused by tropical cyclone Freddy negatively impacted its Mozambique sugar operations.
The impact on the Mafambisse Estate was minimal. However, it has been established that, at Xinavane Estate, 159 000 t of sugarcane will be lost, of which 90 000 t is owned by independent farmers – including small-scale growers – and 69 000 t by Tongaat.
This represents about 10% of the sugarcane estimated to be crushed by the Xinavane mill during the 2023/24 season.
Despite this, the company’s operations in Mozambique are expected to be able to produce sufficient sugar to supply the domestic market, including the refined sugar requirements, of Mozambique.
The crushing season will begin on April 25 for Xinavane and on May 16 for Mafambisse.
The JSE temporarily suspended the listing of Tongaat securities on July 20 last year for failing to timeously publish its audited year-end financial statements for the financial year ended March 31, 2022.
To have the listing reinstated, the company is required to provide an update on its current state of affairs and the proposed remedial actions.
Tongaat said on April 3 that, given the ongoing business rescue proceedings, it would only be possible to consider the finalisation of the 2022 financial statements after the publication and approval of the business rescue plan.