Tongaat Hulett is to hold a shareholders meeting on Thursday. Photo: Supplied
The Vision Consortium (VC) that won the bid to rescue southern African sugar group Tongaat Hulett, say their position is irreversible in the business rescue proceedings and no outcome at the shareholder meeting on Thursday can change this, in spite of RGS Group trying to make a new offer.
The VC is made up of entrepreneurs Robert Gumede of Guma Agri, Rute Moyo of Remoggo, and Nauman Khan of Almoiz. The Mozambique-based RGS’s first plan was withdrawn a day before the creditors meeting after it was discovered by THL lenders and its business-rescue practitioners (BRPs) that RGS had submitted an alleged fraudulent Absa Bank Mozambique R2 billion proof of funds.
According to information received by Business Report, because VC had to increase its bid for THL due to the RGS offer, it had laid fraud charges against RGS, its directors and its chairman Aquil Rajahussen, with the South African Police Service.
THL lenders or the banks were owed over R8 billion by THL when THL went into business rescue. VC entered into a full and final debt-purchase agreement executed in January, 2024 with THL’s lenders, which was irreversible and to which the lender group had been very supportive.
RGS’s new bid involved injecting R4.45bn into THL to acquire 90% of its shares, with R4bn to be paid to senior secured lenders; the settlement of sugar industry levies owed to the South Africa Sugar Association payment of the first R75 000 of outstanding unsecured creditors claims; and 65 cents in the rand of unsecured creditor claims with the balance to be repaid over five years.
But the outcome of the THL shareholders meeting on Thursday would not impact VC’s role, as the shareholders only have two options to vote on.
They could vote in favour of the debt equity swop for 97.3% shares for VC, and in return the current shareholders would retain 2.7% of the JSE-listed shares of a company that was recapitalised.
Alternatively, they could vote against the debt to equity swop in which case VC would proceed to its right to do a debt to asset swop of all THL assets that were included in the lender debt package, which includes all the assets in the operating businesses in South Africa as well all the shares in the operating businesses in the other jurisdictions.
Current shareholders would then receive zero value for their shares, and THL would be wound down or liquidated through the business rescue process. The creditors approved alternative business rescue plan debt for assets process did not require shareholder approvals, a statement said.
“Vision Investments is confident current shareholders will vote in favour of the debt to equity swop so THL can be taken off business rescue and back to business as usual. The VC is confident they will create value for all shareholders in the JSE-listed THL. It will be surprising if any current major shareholder was to vote against saving THL’s JSE-listing and the jobs in all jurisdictions,” the statement said.
In terms of the approved business rescue plan, the unsecured creditors would be paid R75m by VC. VC said in the past 24 months its shareholders had been engaging regulators, development finance institutions, statutory asset managers, and country sovereign wealth funds. The aim was to further diversify and expand THL’s operations.
BUSINESS REPORT