A very old South African company is closing down after more than a century in business. Tongaat Hulett, which makes sugar, has been around since 1892. That means it has been operating for 134 years. Now, the company is heading towards liquidation because all efforts to save it have failed.
The company’s rescue managers have asked the High Court to start the process of shutting down the business. They say they have tried everything possible to keep the company running, but nothing worked. This is sad news for thousands of workers and their families who depend on this company for their livelihood.
Tongaat Hulett was once a strong and successful business. The company operates three large sugar mills in South Africa. These mills can process more than 4.8 million tons of sugarcane every year. That is a huge amount. The company has deep roots in the KwaZulu-Natal area, where it was named after the uThongathi River.
But the company has been struggling for several years now. The problems started in 2019 when serious accounting issues came to light. Company leaders had made major mistakes with the financial records. This destroyed about R12 billion in shareholder value. It was not an easy situation to fix.
In 2022, the company went into business rescue. This is a simple process where experts try to save a struggling company from closing down. The rescue plan seemed promising at first. A group called Vision Group agreed to help by taking over the company’s debts worth R11.7 billion.
The plan needed money from the Industrial Development Corporation to work. Vision Group and the IDC talked for many months trying to arrange the funding. But they could not reach a final agreement. The deadline passed without the money being secured.
Vision Group says they are still committed to saving the company and protecting jobs. They called the liquidation decision very disappointing. The company’s rescue managers, however, say Vision introduced new demands that were not part of the original plan. These extra conditions made things more complicated and caused delays.
Now Vision Group has sent a letter demanding immediate payment of the R11.7 billion debt. This claim creates a big problem for Tongaat’s survival. The rescue managers say there is no longer any reasonable hope of saving the company.
When the High Court approves the liquidation, a liquidator will be appointed. This person will oversee the process of closing down the company. They will sell the company’s assets and use the money to pay creditors. This is the standard procedure for companies that can no longer continue operating.
The good news is that this liquidation only affects Tongaat’s operations in South Africa. The company’s businesses in Zimbabwe, Mozambique, and Botswana will keep running. Those operations are not part of this shutdown.
Tongaat employs thousands of people directly. Many more thousands depend on the company indirectly. Sugarcane farmers in rural KwaZulu-Natal communities will be especially affected. They grow cane specifically for Tongaat’s mills.
This situation shows how financial problems can bring down even very old and established companies. It was not easy for anyone involved. The rescue managers worked hard for more than a year trying to save the business. But sometimes, despite all efforts, a company cannot recover from its problems.
The South African sugar industry is already facing challenges. This closure will make things harder for everyone in the sector. Workers, farmers, and communities that relied on Tongaat will now need to find new ways to earn their living.
