November 12, 2024
Mutapa considers Tongaat investment
MUTAPA Investment Fund (Mutapa) is evaluating an investment in Tongaat Hulett (Tongaat) alongside Vision Consortium (Vision), officials say.
The development comes as the latter’s spokesperson Rob Bessinger has said a “working arrangement and co-existence with the sovereign wealth fund (SWF) was quite possible based on experiences in other countries”, and the state-controlled behemoth has just snapped up the wealthy Rudland family’s 34 percent stake in Zimre Holdings (Zimre).
Reserve Bank of Zimbabwe governor, John Mangudya
“Mutapa is still assessing the transaction, not least because of the importance of the sugar industry in Zimbabwe,” John Mangudya, the SWF’s chief executive, told The Financial Gazette this week.
“Mutapa is a strategic investment arm of the government (and) it is in this context that it was approached by Vision to consider (investing) in Tongaat,” he said in an exclusive interview Monday.
While the figures and equity percentages involved in the potential transaction were not readily available, this comes as Finance secretary George Guvamatanga has expressed Zimbabwe’s willingness to buy the regional company’s assets for US$95 million.
On the other hand, Mozambique’s public sector fund IGEPE has emerged as a – 17 percent or – minority shareholder in Maputo’s sugar farm, a Tongaat subsidiary.
“SWF is interested in acquiring 100 percent of…Triangle Limited and 50,3 percent of…Hippo Valley Estates (Hippo Valley)…held by Tongaat Hulett,” Guvamatanga said in a February 2023 letter.
“When the fund made its offer… it was drawing on… the fact of aged plant, equipment and… the need for new, higher-yielding (sugarcane) varieties,” he said.
And Mangudya’s confirmation of Mutapa’s interest also follows Vision’s representatives – including Remoggo (Mauritius) PCC owner Rutenhuro Moyo and South African billionaire Robert Gumede’s – visit to Harare last week for “stakeholder engagements”, as the trans-Limpopo group seeks to tie loose-ends in its takeover plan of the sugar processor.
Finance ministry secretary George Guvamatanga
With Tongaat swamped in a Rand 12 billion accounting scandal and debt overhang, which has led it to its bankruptcy and Johannesburg Stock Exchange suspension, the interest group finally won creditor banks’ approval as a suitor in January after bruising battles with RGS Group of Mozambique, Tanzania’s Kagera and beating off competition from the Rudland-owned Magister Investments.
And last week, the regional consortium got a boost in its bid to takeover the sugar producer after the Hasnain Gulamo-owned RGS withdrew its litigation against several parties in South Africa.
Even, though, Vision has acknowledged the Zimbabwean SWF’s interest in line with regional trends – Bessinger says their “top priority and immediate focus is to stabilise the business, increase diversification and restoring profitability”, which might include escalating its power generation ambitions, ethanol production, reversing its listing suspension and other opportunities.
Crucially, Vision has underscored its desire and commitment to engage stakeholders, especially contract farmers and black out growers under the auspices of the South African Sugar Association as well as deal with tricky land, and water rights across the region.
“Having been involved in this transaction since late 2020, we always believed that in the right hands, Tongaat can return to be a great business,” it said in a recent statement.
“We have a team that has a sustainable plan to turnaround, grow and diversify the group back into relevance,” Tongaat said.
Apart from Zimre, Mangudya’s new employer has seized control of Kuvimba Mining House – a resources group made up of ex-Zimbabwe Mining Development Corporation and other private assets such as Bindura Nickel Corporation and the former Metallon Corporation’s mines.
In the meantime, Mangudya and the Zimre development also come as President Emmerson Mnangagwa’s government has “continued to facilitate Mutapa’s expansion through enabling policies, and other deals”.
