On 17 June, when the liquidation hearing was due to begin, the Durban High Court granted Tongaat Hulett’s (THL) joint business rescue practitioners (BRPs) leave to withdraw the company’s provisional liquidation application after a breakthrough agreement was reached between them, the Vision Consortium, and the Industrial Development Corporation (IDC).
THL said in a statement that the deal will pave the way for the implementation of the adopted business rescue plan.
The BRPs, Trevor Murgatroyd, Peter van den Steen, and Gerhard Albertyn, senior corporate turnaround specialists at Metis Strategic Advisors, added that two critical requirements had to be met before they would consider withdrawing the liquidation application: securing unconditional funding to keep THL operating, and concluding a practical transaction capable of delivering the objectives of the rescue plan.
According to the company, substantial progress has been made on both fronts.
Agreement enables rescue plan to proceed
Under the agreement, the IDC will convert its post-commencement funding into an ownership stake in THL’s rescue structure, becoming a major shareholder in Vision’s operations across South Africa, Zimbabwe, Mozambique, and Botswana, according to the statement.
To ensure the company remains financially stable during the transition, the IDC has extended its funding facility until the end of September 2026, while the rescue plan is implemented.
At the same time, Vision, which includes investors from South Africa, Zimbabwe, Egypt, and Pakistan, will provide the funding needed to pay outstanding creditor claims, including THL’s obligations to the South African Sugar Association.
The BRPs said these developments had given them sufficient confidence that the business rescue plan could proceed, justifying the withdrawal of the liquidation application.
They added that they were relieved to no longer pursue liquidation, describing its withdrawal as an important milestone for everyone who depends on THL and the wider sugar value chain.
The BRPs said liquidation had only been pursued as a statutory last resort after they concluded that the rescue plan could no longer be implemented. However, they had always recognised the severe impact that liquidation would have had on employees, growers, suppliers, creditors, and the many communities whose economies are linked to THL.
Relief for the sugar industry
Speaking to Farmer’s Weekly, South African Canegrowers Association (SA Canegrowers) Chairperson Higgins Mdluli said the agreement is a major breakthrough that secures the future of a significant portion of the country’s sugar industry.
He said removing the immediate threat of liquidation should allow THL’s mills and refinery to continue operating without disruption, adding that more than 17 500 sugar cane farmers are directly dependent on the company’s milling operations.
Mdluli also acknowledged the role that government played in supporting the business rescue process.
“We would like to thank the government, especially the Department of Trade, Industry and Competition, and the IDC, for recognising the significance of the sugar industry to the national economy.
“Tongaat Hulett’s mills have continued to be operational, even as the liquidation hearing was looming, due in part to bridging funding from the IDC,” he said.
Among those affected on the ground, North Coast small-scale sugar cane farmer Iversen Soonder said the decision has come as a major relief to him and his colleagues who supply THL’s mills.
“It was a touch-and-go situation for half of the year. We were very uncertain and did not know if this season would be our last. My workers were worried for their families, and so was I.
“When we heard about this news, it gave us all a renewed sense of hope. But I don’t think we are completely out of the [woods] because the business rescue process is still going to continue, and what if the agreement falls through again? We will just have to wait and see now,” Soonder said.
Imported sugar still a major threat
Despite the agreement, both THL and SA Canegrowers warned that the local sugar industry continues to face a serious threat from rising imports of cheap sugar.
THL said record import volumes are placing increasing pressure on local producers, with an estimated 111 696t of imported sugar expected during the first three months of the 2026/27 season alone. This is almost half the total imports recorded for the entire 2025/26 season, and the company said that if current trends continue, imports could reach around 450 000t this season.
THL also warned that similar high import volumes in 2018 had resulted in substantial job losses and the closure of two sugar mills.
“While withdrawing the liquidation application and extending post-commencement funding are significant achievements, they do not resolve the underlying structural challenges facing the industry,” THL said.
The company added that unless urgent steps are taken to curb the flood of imported sugar, its recovery and the future of South Africa’s sugar industry could be at risk.
Mdluli echoed these concerns, saying the industry must now focus on tackling subsidised sugar imports.
“As a unified industry, we can also address other immediate challenges facing us, especially the still persistent flood of imported sugar into South Africa.
“Unfairly subsidised sugar from countries such as Brazil and Thailand is currently displacing locally produced sugar from retailers and food and beverage manufacturers. This affects growers and local millers alike, including Tongaat Hulett,” he said.
