Dubbed the largest sugar producer in South Africa, Tongaat Hulett has received a massive financial boost from the Industrial Development Corporation.
The IDC has pumped up an undisclosed amount of money into the struggling sugar producer, Tongaat Hulett.
News24 reports that Tongaat Hulett has received an undisclosed sum from the Industrial Development Corporation (IDC) to help it complete its milling season and do maintenance.
Tongaat was placed in business rescue back in October following a development by lenders that failed to give their backing to a restructuring plan.
“The finance advanced by the IDC, known as post-commencement finance, is the group’s first cash injection since it was placed into business rescue,” said Tongaat to News24 but not revealing the amount it received.
“The sugar group’s business rescue practitioners described the IDC’s finance as a “meaningful step forward”.
“This funding ensures that we are able to continue making payments to employees, growers, and other suppliers whose livelihoods depend on Tongaat Hulett.”
It was widely reported back in July that trade in the group’s stock was halted after it failed to announce its audited annual financial statements for the year to the end of March 2022. Tongaat pronounced that it could not say when the JSE suspension would be lifted.
Additionally, the sugar maker said it would only be able to complete these financial statements after its business rescue plan has been approved.
The plan is now expected to be released by the end of January 2023 and this means trading in Tongaat’s shares will remain suspended for at least another month.
“Roughly two weeks after the business rescue plan is expected to be published, a number of ex-Tongaat executives are expected to make their second court appearance on fraud-related charges,” said the publication.
BusinessTech Africa recently reported that despite its financial struggles, Tongaat Hulett will pay its workers their December salaries including a 13th pay cheque.
Local publications posted that the workers at Tongaat Hulett, which is in business rescue, will receive their December salaries and 13th cheques following a business rescue consultation last week, according to trade union UASA.
UASA spokesperson Abigail Moyo it is pleasing that the company managed to secure money for salaries but they are still concerned about the company.
