Africa-Press – South-Africa. Representative body SA Canegrowers says its members have accepted payment terms offered by the business rescue practitioners of Tongaat Hulett that will ensure commercial growers receive payments which are coming due at the end of November, while the firm will continue to receive sugarcane.
Payments due to small-scale growers at the end of November 2022 for sugarcane delivered in October will be paid in full, while suitable terms have been agreed for staggered payments to commercial growers, the group said in a statement on Wednesday.
Most commercial growers have already received payment for cane delivered in September, due at the end of October, while there has also been an agreement to waive claims for interest due on delayed funds. Growers had required payment prior to any resumption of supplies to Tongaat Hulett.
“Once the outstanding October payments are effected, growers will resume deliveries to the mills in Felixton, Maidstone, and Amatikulu, enabling Tongaat Hulett to resume operations at its mills and refinery, and to once again generate cashflow,” SA Canegrowers chair Andrew Russell said in a statement.
“But the crisis for the industry is far from over. It remains to be seen whether Tongaat Hulett will be able to secure the funding needed to complete the off-crop maintenance that is required for its mills to operate next season.”
Tongaat Hulett entered business rescue in late October after lenders opted not to approve the sugar producer’s restructuring plan, which was aimed at solving an excess debt pile in SA of more than R6 billion. The excess debt was causing a cash crunch at the firm even as it looked to complete its milling and crushing season.
The practitioners said on Tuesday they had requested lenders allow about a two-month extension for publishing their business plan, seeking to deliver it by the end of January, while also saying talks on further post-commencement financing continued. A response from lenders, which include most of SA’s major banks, is expected by Friday.
Russell said on Wednesday there was still a risk that Tongaat wouldn’t emerge from business rescue, which would again plunge the industry into crisis.
“It therefore remains essential that critical stakeholders, including government and lenders, work with the industry to ensure the success of the business rescue process. This is why SA Canegrowers continues to implore Minister of Trade, Industry and Competition, Ebrahim Patel, and Minister of Agriculture, Land Reform, and Rural Development, Thoko Didiza, to meet with industry stakeholders to address this situation.”
“The demise of Tongaat Hulett would undo years of work under the Sugarcane Value Chain Masterplan, reversing efforts to shield the local market from cheap sugar imports and protect the one million livelihoods that depend on the sugar industry,” Russell said.
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