Tongaat Hulett’s business rescue practitioners have secured finance to pay all workers’ wages after the firm went under voluntary business rescue, the United Association of South Africa (Uasa) said on Thursday.
Uasa trade union spokesperson Abigail Moyo said that it was “encouraging” that the firm had managed to secure funding to pay wages at the end of November, but it remained “deeply concerned” about its financial state.
“The company needs R1.5 billion to service roughly R6.3bn in debt and to continue its sugar milling season. However, after advancing R600 million, lenders now want this repaid,” Moyo said.
Tongaat Hulett’s board approved a restructuring plan, announced on October 27. The plan included provision to dispose of its non-South African operations, secure investment for its South African business, and to introduce a five-year debt instrument that would be repaid through land disposals.
It also included a plan to recoup money lost due to its accounting scandal that led to its former CEO Peter Staude, and former CFO Murray Hector and other executives, facing charges related to fraud amounting to about R3.5bn.
Tongaat directors Michael Edward Deighton, Rory Edward Wilkinson, finance executive Samantha Shukla, legal executive Kamasagrie Singh, and auditor Gavin Dykes Kruger of Deloitte and Touche are among the accused in the matter who are out on bail.
“Unfortunately, the South African lender informed Tongaat that it would not support or provide additional funding for the restructuring plan. Uasa is deeply disappointed with the former CEO and executives of the company. They were allegedly involved in fraud that left the company on the brink of bankruptcy and risked the livelihood of the employees and cane growers,” Moyo said.
It is unclear at this stage whether the company has managed to secure funding to pay employees’ December salaries.
“Uasa encourages its members at Tongaat not to lose trust in their management with the assistance of the business rescue practitioners as they work hard to secure funding and restore operations in the company,” Moyo said.
Meanwhile, Tongaat Hulett is awaiting a decision from its business rescue practitioners after it asked lenders to extend the timeline for publishing its business rescue plan until the end of January. It is expecting a decision on Friday.
