RCL, sugar association seek court action to halt Tongaat BRPs’ creditor meeting
The sugar and milling arm of JSE-listed food producer RCL Foods and the South African Sugar Association (Sasa) have filed an urgent application in the KwaZulu-Natal Local Division of the Durban High Court with aims of interdicting Tongaat Hulett’s business rescue practitioners’ meeting with creditors on Friday.
The two entities filed separate applications on Tuesday, following Judge Vahed’s delivery of his judgment on Monday dismissing with costs, the BRPs’ – Metis Strategic Advisors’s – attempts to avoid settling an industry levy which has previously been reported to total R900 million.
RCL – which owns the Selati sugar brand – and Sasa both want the matter heard in court on Thursday morning.
Further, both RCL and Sasa are looking for the courts to declare the rescue practitioners’ latest proposed rescue plan as unlawful and thus set aside. As it stands, Tongaat’s rescue plan does not seem to take into consideration Tongaat’s debt to Sasa.
Last week, the rescue practitioners announced to shareholders that they would be presenting two proposals to creditors, one from the RGS Group – a Mozambican conglomerate – and another from a grouping referred to as the Vision Parties – which includes Terris Sugar, Guma, Remoggo and Almoiz.
This is just the latest development in the tussle between sugar industry stakeholders and Tongaat Hulett’s rescue practitioners.
The industry has been trying to get Tongaat and Gledhow Sugar Company to settle a R1.5 billion bill with Sasa, with the industry noting that the two firms’ non-payment has the greatest impact on small-scale cane growers.
After missing the payment due date in March 2023, Tongaat’s BRPs took to the courts to seek support in their argument that rescue proceedings take precedence over the sugar producer’s agreements with the industry. This argument was subsequently dismissed, with the courts finding no merit in the BRPs’ position.
The BRPs have told Moneyweb that they will not be commenting further on the latest court action and have instead maintained they will be studying Tuesday’s judgment and its implications, after which they will decide on a way forward. – moneyweb.co.za