Tongaat pays most cane bills

The bulk of outstanding payments owed to commercial cane growers have been made by embattled sugar giant Tongaat Hulett, the SA Canegrowers Association said on Wednesday, as both parties reached an agreement on short-term payments for sugar cane deliveries.

The bulk of outstanding payments owed to commercial cane growers have been made by embattled sugar giant Tongaat Hulett, the SA Canegrowers association said on Wednesday, as both parties reach an agreement on short-term payments for sugar cane deliveries.

Tongaat Hulett, SA’s biggest sugar producer and land developer whose future is now in the hands of business rescue practitioners, missed a R400m payment for sugar cane deliveries, threatening the livelihoods of thousands of workers delivering cane to a number of its mills in KwaZulu-Natal

“SA Canegrowers’ members have accepted a proposal by the Tongaat Hulett Ltd business rescue practitioners that ensures payment of monies owing to growers for cane delivered to Tongaat Hulett mills,” the organisation said in a statement.

It said the move “is a critical step to protecting the thousands of livelihoods at stake on the north coast of KwaZulu-Natal”.

Under the agreement, outstanding October payments to commercial growers for sugar cane delivered in September will be made by Friday, it said.

Payments due to small-scale growers at the end of November for sugar cane delivered in October would be paid in full as suitable terms had been agreed on to allow for staggered payments to commercial growers.

The business rescue practitioners confirmed that the outstanding payments to service providers such as contractors, haulier companies, and input suppliers without whom growers cannot operate, will also be paid this week, together with payments to commercial growers.

The association said 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 cash flow.

Tongaat’s business rescue practitioners met creditors on Tuesday to discuss the current status of the process, which includes the advancement of the initial amounts of urgent post-commencement finance, which facilitated payments to certain critical suppliers and/or creditors, including small-scale growers.

In a statement, the business rescue practitioners said they had sought approval from creditors for an extension of the date for publishing the business plan to the end of January 2023. They said creditor feedback on the extension would be provided by Friday, while the practitioners continued their efforts to obtain additional post-commencement finance.

Calling on the government to step in and intervene, the canegrowers association warned that the problems were far from over as uncertainty about the future of the company, which is one of the largest employers in Southern Africa, remained.

This is largely due to the fact that it still remains to be seen whether Tongaat will be able to secure the funding needed to complete the off-crop maintenance required for its mills to operate next season.

SA Canegrowers again implored the trade, industry & competition minister, Ebrahim Patel, and agriculture, land reform & rural development minister Thoko Didiza, to meet industry stakeholders to address this situation.

“The risk remains that Tongaat Hulett will not emerge from business rescue, once again plunging the industry into a crisis,” the organisation said.

“The demise of Tongaat Hulett would undo years of work under the Sugarcane Value Chain Master Plan, reversing efforts to shield the local market from cheap sugar imports and protect the 1-million livelihoods that depend on the sugar industry,” it cautioned.

The fallout would lead to nearly 15,000 permanent and seasonal farm workers employed by sugar cane growers being at risk of losing their jobs.