Tongaat Hulett Limited’s (Tongaat) ZAR5,9 billion (US$330,05 million) sale to the Vision Group faces an uncertain future after its business rescue practitioners (BRPs) filed for liquidation at the South African High Court, jeopardising local units Triangle Limited (Triangle) and Hippo Valley Estates Limited (Hippo).
Tongaat, a South African agriculture and agri-processing firm, operates locally through Triangle — which it wholly owns — and Hippo, where Triangle holds a 50,32% controlling stake. Hippo is listed on the Zimbabwe Stock Exchange.
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. All Tongaat’s assets are pledged as security. In its last recorded financial statements for the year ended March 31, 2021, the company reported total assets of ZAR13,27 billion (US$838,42 million).
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.
Under the adopted rescue plan, Tongaat agreed to sell 100% of its shares and shareholder loan claims in Triangle to a Vision Group-controlled Mauritian nominee, transferring effective control of Triangle and its 50,3% stake in Hippo.
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However, these efforts could be halted following an urgent chamber application filed at the South African High Court today.
“This application is premised on the obligations of the BRPs as set out in Section 141(2) of the Companies Act (South Africa),” said Metis Strategic Advisors (Proprietary) consultant Gerhard Conrad Albertyn, one of the three appointed Tongaat BRPs.
“The BRPs have concluded, on objective grounds, that there is no longer a reasonable prospect of rescuing Tongaat. Accordingly, we have instituted this application, as we are obliged to do, for an order in terms of which the business rescue proceedings of Tongaat are discontinued and the company is placed into provisional liquidation as envisaged under Section 132(2)(a)(ii), read together with Section 141(2) of the Companies Act.”
If the High Court grants the liquidation order, control of Tongaat’s assets would shift from the BRPs to court-appointed liquidators, effectively terminating the existing rescue plan under which the Vision Group was to acquire the company.
For Zimbabwe, this would mean the planned transfer of Triangle and the indirect change of control at Hippo could collapse, resetting the sale process and placing the sugar assets within a liquidation estate.
As a wholly owned subsidiary of Tongaat, Triangle forms part of the parent company’s asset base and would fall directly under the control of liquidators, who could dispose of it to realise value for creditors.
Hippo’s assets, as at the half-year ended September 30, 2026, were valued at US$209,12 million.
“There is no longer a possibility of continuing to implement, and therefore achieve substantial implementation of, Tongaat’s approved business rescue plan, nor is there any longer a reasonable prospect of the company being rescued within the meaning of Section 128(1)(b) and (h) of the Companies Act,” Albertyn said.
“Tongaat does not have access to the requisite further funding and, critically, does not have certainty regarding the refinancing or restructuring of the existing post-commencement funding (PCF) facility, which is required to restore a sustainable capital structure and to enable Tongaat to continue to fund, inter alia, its operations and working capital requirements.”
The PCF relates to funding provided by the Industrial Development Corporation (IDC) during Tongaat’s rescue proceedings to support working capital and stabilise operations.
Albertyn said adverse market conditions, particularly during the second half of 2025, had worsened the company’s position.
“Increased volumes of imported sugar into South Africa, driven by a significant decline in global sugar prices, a stronger exchange rate, and delays in implementing necessary tariff adjustments and reviewing the overall import duty framework, have materially reduced the level of duty protection available to domestic producers,” he said.
“This has led to a significant decline in Tongaat’s sales volumes and margins, as well as increased diversion of locally produced sugar into lower-priced export markets, cumulatively resulting in additional negative cash flows.”
Under South Africa’s Sugar Industry Agreement, Tongaat owes statutory payments administered by the South African Sugar Association (SASA), the industry regulator. The agreement constitutes subordinate legislation under South Africa’s Sugar Act and is binding on all industry participants.
“A request by Tongaat to SASA to increase the manufacturing allowance for refined sugar resulted in an adjustment which remains insufficient to compensate Tongaat for refining sugar in excess of its quota,” Albertyn said. “As a consequence, Tongaat continues to incur unrecovered refining costs.”
He added that broader industry reform had been slow.
“Much-needed sugar industry reform has been slow to materialise, with various proposed amendments not yet gazetted. This continues to negatively impact Tongaat’s cash flow.
“The urgent need for short-term interim funding will not be met, and the closing of the Sale of Business Agreement relating to Tongaat’s South African sugar operations and corporate office, as required for successful implementation of the adopted business rescue plan, will not take place.”
While immediate funding shortfalls had largely been mitigated through management and operational initiatives, he said challenging trading conditions continued to pressure cash flows, leaving insufficient headroom within the existing PCF facility to absorb further adverse events.
“The PCF facility, as provided thus far by the IDC, has been substantially utilised and, absent refinancing or restructuring to separate working capital requirements from accumulated non-working capital items and restore sustainable facilities, is expected to be depleted during the forthcoming milling season,” Albertyn said.
“But for the PCF, Tongaat would not have been able to make payments to employees, creditors in business rescue, and cane growers. Tongaat is commercially insolvent, as it is unable to meet its liabilities in the ordinary course, and ought to be placed into provisional liquidation.”