WeeklySA_AdminRESCUE: South African canegrowers are seeking urgent intervention to halt the proposed liquidation of sugar giant Tongaat Hulett, warning that the collapse of the century-old company could threaten the livelihoods of up to 250 000 people across the sugar value chain…
By Tania Broughton
The South African Canegrowers Association is seeking to intervene in an urgent court application by Tongaat Hulett’s business rescue practitioners (BRPs) to place the struggling sugar producer into provisional liquidation.
The application follows the collapse of a business rescue deal involving the Vision Group, with growers warning that liquidation could threaten the livelihoods of as many as 250,000 people who depend on the sugar industry.
The matter was heard virtually in the Durban High Court, where Judge Sanele Hltshwayo adjourned proceedings to allow additional parties — including government and creditors — to file further affidavits. New hearing dates are expected in mid-March.
Several stakeholders, including the Industrial Development Corporation (IDC) and Trade, Industry and Competition Minister Parks Tau, oppose liquidation.
Growers and creditors have called for an investigation into the collapse of the rescue plan, arguing that Tongaat received more than R2.5 billion in post-commencement funding and that alternatives to liquidation remain possible.
Given the opposition from several parties — including trade, industry and competition minister Parks Tau and the Industrial Development Corporation (IDC), which provided post-commencement finance to Tongaat — and the number of parties intending to intervene, the judge adjourned the matter. He set tight deadlines for further affidavits.
Judge Hltshwayo said the Judge President was aware of the urgency and was expected to allocate hearing dates in mid-March.
Advocate Ruan van Rooyen, appearing for the canegrowers’ association, placed on record that it would formally apply to intervene.
The association has previously warned that liquidation poses a “profound risk” that threatens the livelihoods of thousands of small- and large-scale growers.
In a separate application to intervene, Abrina, which owns two sugar farms contracted to Tongaat, has proposed that all contracted growers “caucus” to explore taking over the company’s milling and refinery operations on an interim basis to prevent collapse.
Abrina has also called for an investigation into the bona fides of the winding up application, which it says “appears to be contrived”.
Its owner, Kadarnath Maharaj, states in his affidavit that it was “almost inconceivable to the public at large that an entity like Tongaat be wound up to the detriment of the livelihoods and income relied upon by about 250,000 people”.
He said the BRP’s conduct should be investigated, given that Tongaat had received more than R2.5-billion in post-commencement funding and that the practitioners could have sought an extension of the business rescue process from the court.
“This point, amongst others, screams out that the winding up application is contrived and designed to exert undue pressure or bully the IDC into submission to lend Vision (further) money,” Maharaj said.
During the business rescue, Vision acquired the lender group’s R11.7-billion debt, becoming the controlling creditor. Maharaj contends that Vision had thereby “imposed its own business rescue plan” on the creditors.
‘Doomed to fail’
According to the BRPs, Vision called in this loan after negotiations with the IDC for an additional R600-million to prop up the company failed, with the IDC insisting that Vision contribute at least half the amount itself.
Maharaj also said that when the rescue plan was approved in January 2024, largely through the “might” of Visions’ voting rights, Vision did not lawfully “stand in the shoes of the banks” because the transfer of the banks’ claims was only finalised in May 2025.
Creditor RGS Group Holdings, which has repeatedly challenged the Vision plan in court, mostly unsuccessfully, is also opposing the liquidation. It has filed a counter application seeking dismissal of the liquidation application and an order setting aside the Vision plan.
If successful, the business rescue process would continue and RGS would propose a new rescue plan.
RGS chair Momade Aquil Rajahussen said in his affidavit that Vision’s plan was “doomed to fail” because it lacked the necessary funding and because “material facts” had been withheld from affected parties.
He said Vision had funded the purchase of the lender group’s claims with borrowed money, not its own capital, and later sought to enforce that claim, conduct he called “predatory behaviour”.
Vision has not yet filed papers. But in a press statement, it pledged to “salvage the business”. In meetings with unions, it said it was in discussions with the IDC. – GroundUp
