R400m to be paid to thousands of sugar cane growers
Tongaat Hulett business rescuers assure affected parties
The business rescue practitioners tasked with resuscitating debt-laden Tongaat Hulett have vowed to make the outstanding R400m payment to thousands of cane growers, according to the SA Farmers Development Association (Safda).
The SA Canegrowers Association has requested urgent engagements with the president and the ministries of trade and agriculture to map out possible government financial intervention in the situation threatening the livelihoods of thousands of sugarcane growers and workers delivering cane to a number of Tongaat Hulett mills in KwaZulu-Natal.
The developments come after a planned meeting with the associations on Wednesday where the Tongaat business rescue team comprising Trevor Murgatroyd, Petrus van den Steen and Gerhard Albertyn engaged stakeholders who are said to be owed payments exceeding R400m for September cane deliveries.
On Wednesday after the meeting Safda chair Siyabonga Madlala said the meeting with the practitioners was fruitful as “they’ve given an undertaking that they have confirmation the banks will fund the payment to growers”.
“They are at the stage where they just need to sign the relevant documents, so they’ve got approval from the bank that they will pay the outstanding amounts that were due by the end of October,” Madlala said.
More than 4,300 growers and 14,642 farm workers have been affected by Tongaat’s business rescue which began on October 27.
According to SA Canegrowers, an estimated R345m will become due at the end of November for October deliveries.
The association said though the engagement with Tongaat’s business rescue practitioners was positive, it also highlighted the magnitude of the task at hand, and the need for government intervention to ensure that the Tongaat Hulett’s growers can survive while the business rescue process continues.
“This is why we have requested urgent meetings with the president, [trade, industry and competition] minister [Ebrahim] Patel, and [agriculture] minister [Thoko] Didiza to discuss what funding government can make available in order to ensure that the work done under the auspices of the sugarcane value chain master plan over the past two years to position the sugar industry for the future has not been in vain,” the association said.
A shutdown of the 130-yearold company would see nearly 15,000 permanent and seasonal farm workers out of jobs, devastating an already ailing economy characterised by stubbornly high unemployment.
In the fallout from SA’s largest corporate scandal, after Steinhoff, Tongaat has been battling since 2018 with a ballooning debt pile despite being granted multiple extensions by supportive lenders before the taps ran dry last month.
The KwaZulu-Natal sugar giant, with operations in Mozambique, Zimbabwe and Botswana, need R1.5bn to repay current debt and finance its working capital.