Hippo Valley Estates Limited (Hippo) and Triangle Limited (Triangle) say the liquidation application against their South African parent, Tongaat Hulett Limited (Tongaat), will not affect local operations, with Hippo’s market capitalisation rising by US$3,01 million a day after the filing.
On Thursday, Tongaat’s business rescue practitioners (BRPs) filed an application to liquidate the company at the High Court of South Africa.
In explaining the move, the BRPs said they were legally compelled to seek liquidation after concluding there was no longer a reasonable prospect of rescuing Tongaat.
They cited severe cash flow pressures, depleted post-commencement funding from the Industrial Development Corporation (IDC), mounting industry headwinds, and the company’s inability to meet its obligations in the ordinary course of business as reasons for the filing.
This comes despite a ZAR5,9 billion (US$330,05 million) debt-to-asset deal with a South African consortium known as the Vision Group.
Despite the filing, Hippo’s real-term market capitalisation on the Zimbabwe Stock Exchange rose by US$3,01 million on Friday to US$60,41 million, up from US$57,4 million on Thursday, suggesting limited immediate market concern.
“We recognise that news of Tongaat Hulett Limited’s liquidation in South Africa may cause concern about our operations here in Zimbabwe. We want to provide clarity and assurance,” Daliah Garwe, head of corporate and industry affairs, said in a statement.
“The joint business rescue practitioners of Tongaat Hulett Limited (THL) have applied to the High Court of South Africa for an order discontinuing the company’s business rescue proceedings and placing THL (South African operations) into provisional liquidation.”
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Under the debt-to-asset deal, Tongaat had also agreed to sell 100% of its shares and shareholder loan claims in its wholly owned subsidiary, Triangle, to a Vision Group-controlled Mauritian nominee.
This would have transferred effective control of Triangle, which in turn holds a 50,32% stake in Hippo.
Garwe said the filing followed the business rescue plan becoming no longer implementable after the debt-to-asset deal lapsed.
“The developments in South Africa do not involve our Zimbabwean operations, which function as independent legal entities with separate management, finances and operations,” she said.
“Triangle Ltd and Hippo Valley Estates Ltd remain financially robust, operationally sound and fully committed to all contractual obligations. Production continues normally, and we reaffirm our commitment to Zimbabwe’s agricultural sector and communities.”
Tongaat entered voluntary business rescue in October 2022 after total claims and debt swelled to about ZAR13 billion (US$721,6 million), a figure later confirmed at ZAR10,4 billion (US$634,53 million) in a recent South African court judgment.
The debt is owed to roughly 1 000 creditors, with all of Tongaat’s assets pledged as security.
Tongaat had total assets valued at ZAR13,27 billion (US$838,42 million) in its last recorded financial statement for the year ended March 31, 2021.
Following an extensive bidding process, the Vision Group was selected to acquire Tongaat’s business and assets in a ZAR5,9 billion (US$330,05 million) transaction as part of a debt-to-asset rescue deal agreed in January 2024.
However, these efforts could be halted if the provisional liquidation is approved by the High Court of South Africa.
Should that happen, control of Tongaat’s assets — including Triangle — would shift from the BRPs to court-appointed liquidators, effectively terminating the existing rescue plan.
