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A consortium led by global entrepreneur, Robert Gumede, has paid what was due to the lender group of financial institutions to take finally take over Tongaat Hullet Limited.

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Sizwe sama Yende

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After a century and half of existence, sugar giant, Tongaat Hullet Limited (THL), is now officially under black ownership for the first time in history.

A consortium led by global entrepreneur, Robert Gumede, confirmed this milestone on Tuesday after paying a R3.6 billion balance of R13 billion to the lender group of financial institutions on May 9 to acquire 100 per cent of THL’s assets. 

Gumede said that Vision Sugar has also paid R75 million for the secured creditors of THL following the approval of its business rescue (BR) plan on January 11 2024.

He described the acquisition as a beginning of a new era under black industrialists to secure 25 000 jobs and sustain over 250 000 beneficiaries of the sugar sector that include small-scale sugarcane growers. More investment would be made towards new sugarcane plantations, diversification into energy - power and ethanol production - and deepening partnerships with growers.

Gumede debunked rumours that Vision intended to sell the Mozambican business. THL operates in KwaZulu-Natal, Mozambique, Zimbabwe and Botswana.

The South African unit faced financial distress due to due to massive corporate fraud worth R2.5 billion under former CEO Peter Staude’s stewardship, and was placed under business rescue in October 2022.

“Contrary to RGS Holdings of Mozambique (which bid for THL), its litigious chairman Acquil Rajahussen and some of the former shareholders of the THL, Vision Sugar is not going to break up and sell any of its operating businesses in all four countries.  Instead we intend to invest more and create sustainable jobs in Vision Sugar and for small scale sugarcane growers in all countries where we are operating. We are also keen to consolidate the sugar sector in the region given the skill’s depth in Vision Sugar Consortium,” Gumede said. 

The consortium has fought a lengthy battle, circumventing skulduggery and criminality from competitors to buy the multinational sugar company’s assets.

Vision Sugar was formed by Gumede’s Guma Agri & Food Security, Rute Moyo of Remoggo, Amre Younis of Terris Agric and Nauman Khan of Almoiz.

The lender groups, which were the biggest creditors, exercised their rights to recover their monies when the company violated covenants in respect of their loans by pushing for the business rescue process. 

All is now left in the hands of the “black knights” to turn the fortunes of this iconic sugar group, Gumede said. 

Gumede thanked the Industrial Development Corporation (IDC) board and management for not only having provided much needed assistance to THL during the business rescue process but also for having entered into an agreement with Vision Sugar to restructure the post-commencement finance facility from R2.3 billion to R1.4 billion.

The IDC and Standard Bank provided the commercial loans to Vision Sugar to settle with the lender group as well as additional working capital to cover operational costs. 

“We are indebted to the IDC for the way they showed their commitment to not only protect the jobs in KZN and the region, the iconic sugar company and property group but also to have facilitated the transfer of a giant cornerstone of the regional sugar industry to black industrialists who are known and respected hands-on value-adding serial entrepreneurs,” Gumede said. 

FRIVOLOUS LITIGATIONS 

The consortium’s bid was, however, a rocky road.

The business rescue practitioners and the lender group faced many frivolous legal actions in the past year, which were largely sponsored and led by aggrieved RGS Group Holdings.

RGS was forced to withdraw presenting its BR plan a night before voting by creditors after Vision exposed the company for providing a fraudulent and fake ABSA Mozambique confirmation of the availability of over R2 billion cash to acquire the THL businesses. 

Vision Sugar has since laid fraud charges against RGS and Rajahussen. RGS have continued to litigate without success including using other companies as jockeys for their legal actions. 

RGS, together with its surrogates, have lost each and every urgent high court application they have brought to try to set aside the approved Vision Sugar BR plan.

In addition, RGS together with aggrieved shareholders led by Dave Woollam have been on a campaign to discredit and question the Vision Sugar plan.

Gumede has previously questioned RGS’ inflated offer of over R8 billion as a “phantom pregnancy” made up of monopoly game money. He has also questioned Woollam and his partners of acting like aggrieved shareholders when in fact they had allowed the THL management to commit fraud under their watch. 

ICONIC NAME

THL was founded by the Hullet family about 150 years ago. The Oppenheimer’s Anglo American bought into Tongaat Hullet in 1962 and controlled the company until 2009.

Tongaat Hulett remained an iconic name and was seen as one of the top conglomerates in SA and the SADC region until massive corporate fraud was unearthed.  

This led to incredible value destruction that threatened jobs and small businesses. 

 THL shareholder’s brought in new management under former SABMiller executive Gavin Hudson, but that did not have an impact and the board was forced to place the company under business rescue.

Gumede said that Vision was not deterred by the South African Sugar Associations’ claim of R517 million that is still before court after the BRP’s lodged an appeal.  

“As much as this legal action pre-dates Vision Sugar, we are working to get a resolution that favours all parties and allows the already battered SA sugar industry to begin a new era of cooperation, growth and sustainability,” he said.

“The IDC and Standard Bank have shown commitment not only protect the jobs in KZN and the region, the iconic sugar and property group but also to have facilitated the transfer of a giant cornerstone of the SADC sugar industry to black industrialists who are known and respected as hands-on and value-adding serial entrepreneurs,” Gumede added. 

MONOPOLY IN ZIMBABWE 

Moyo said that he acknowledged the critical support Vision received from the Zimbabwe government and had noted the recent media reports of plans to “break Tongaat’s monopoly.” 

“Vision welcomes a level playing field for competition, and we will continue with our plans to collaborate with government and the industry to improve the sustainability of this strategic sector and to improve productivity, create more jobs, and invest more into by-products like ethanol, carbon dioxide and power generation,” Moyo said.

He said that THL played an important role in land and property development in South Africa and Zimbabwe. In Zimbabwe, Tongaat owns, operates and is responsible for some medium-sized towns where a developmental model maybe required to ensure sustainable growth and improved services for its work force.