Tawanda Karombo
The Vision Group announced on Wednesday that it has received competition approvals for acquisition of all Tongaat Hulett’s assets in Zimbabwe.
Under the transaction, Ball Foundry has been given the nod by the Competition and Tariff Commission of Zimbabwe to acquire Triangle Sugar Corporation, which holds Tongaat Hulett’s operations in Zimbabwe.
Prosper Ziyadhuma, an official with the Zimbabwe CTC, confirmed this to Business Report on Wednesday.
“We had given them an intended decision as indicated in the notice they provided,” Ziyadhuma said.
Vision Group, whose principals include Mpumalanga businessman Robert Gumede and Zimbabwean business executive Rutenhuro Moyo, has beneficial ownership in Ball Foundry, which is incorporated in Mauritius.
“The purchase consideration will be settled by way of a set-off against a portion of the lender group claims. Triangle Sugar is the holding company of Tongaat Hulett's operations in Zimbabwe,” Tongaat Hulett, currently under business rescue, said in December.
While the transaction for the disposal of Tongaat Hulett’s operations in Zimbabwe was signed on December 21, the agreement had been subject to the fulfillment of a number of suspensive conditions, including employee related conditions.
Tongaat Hulett also confirmed on Wednesday that “the Competition and Tariff Commission of Zimbabwe has provided approval for the Alternative Transaction subject to certain employment-related” conditions.
“These conditions have been duly accepted, rendering the approval effective. This marks the final competition authority approval required across all applicable jurisdictions for the implementation of the alternative transaction,” said the company.
“Tongaat Hulett and the Business Rescue Practitioners continue to work closely with Vision to finalise the implementation of the transaction. This collaborative effort underscores a shared commitment to revitalising Tongaat's operations for the benefit of employees, cane growers, suppliers and rural communities.”
The alternative transaction forms the cornerstone of the Tongaat Hulett adopted business rescue plan and entails the sale of the troubled South African agro-processing and sugar manufacturer’s business and assets - including those in Zimbabwe, Botswana and Mozambique among others - as a going concern.
The sale will be finalised “in a consolidated group transaction” to Vision.
The transaction includes the sale of Tongaat Hulett's South African assets, including its sugar operations and corporate head office, as well as the sale of its shares in and claims against the Zimbabwe, Mozambique, and Botswana businesses.
Earlier this year, the High Court in Durban dismissed RGS Group Holdings’ application seeking to interdict Vision Group’s implementation of Tongaat Hulett’s business rescue plan related to the sale of the agro-processing entity’s assets and businesses.
Last year, creditors in Tongaat voted in favour of a business rescue plan put forward by Vision.
This was after an accounting scandal rocked Tongaat Hulett, with the company tail-spinning into a debt of R8.2 billion and prompting shareholders to adopt an amended business rescue plan, which the company’s business rescue practitioners now intend to implement.
Tongaat Hulett is envisioned to continue playing critical roles in the economic fabric of Southern Africa.
In South Africa, the business “remains a cornerstone of the sugar industry, directly employing 2600 individuals, indirectly supporting 25 500 rural jobs and sourcing cane from 15 000 small-scale growers – thereby sustaining local farming communities, and underpinning numerous rural economies,” especially in the KwaZulu-Natal province.
In Zimbabwe, Tongaat Hulett owns two operating businesses, Triangle and separately listed Hippo Valley Estates. Triangle said recently that it was facing operational challenges that had forced it to retrench employees after cost-cutting measures failed to yield a respite.
It said it had seen profit margins decline significantly by 55%, with manpower costs spiking by 133% as a proportion of revenue and debt levels rose to unsustainable levels.
BUSINESS REPORT