Durban — Ingonyama Holdings, a business wing and subsidiary of KwaZulu’s Ingonyama Trust, has teamed up with Mozambican conglomerate RGS Group Holdings to acquire a controlling stake in cash-strapped Tongaat Hulett Limited (THL).
In an updated list of bidders, recently published by business rescue practitioners, it is now a two-horse race between RGS Group Holdings and a consortium led by Mpumalanga businessman Robert Gumede.
Gumede is in a consortium called Terris which includes business gurus from Zimbabwe and Pakistan under an umbrella known as “The Vision Parties”.
Last month the consortium moved closer to clinching the deal after it apparently secured a R7.9 billion loan with lenders which appeared to have impressed the business rescue practitioners.
The voting on the deal is expected to take place on Friday.
Gumede is a well-known IT businessman from Mpumalanga. In 2011 he made headlines when he bought a 49.9% stake in the Golden Lions rugby club, however the deal later fell through. He is also the founder of the IT firm Gijima Technologies and its holding company, Gijima Group.
According to information obtained, RGS reached out to Ingonyama Holdings late last month requesting it to partner with them to acquire a controlling stake in Tongaat Hulett.
According to documents and insiders close to the two entities, Ingonyama Holdings responded positively on Friday.
In a letter from Ingonyama Holdings to RGS Group, seen by the Daily News, Ingonyama Holdings executive director Lucas Mkhwanazi expressed his gratitude to the RGS Group for considering Ingonyama Holdings as a potential partner in the venture. Ingonyama Holdings have carefully reviewed the proposal, he said, and have taken note of the key points highlighted regarding the partnership’s potential benefits and the reasons why Ingonyama’s participation was crucial to the success of the Tongaat Hulett turnaround.
Mkhwanazi further stated that RGS Group’s impressive track record and experience in various industries, coupled with its commitment to community development, cultural sensitivity and environmental responsibility, align well with values and principles upheld by Ingonyama Holdings.
“We are indeed interested in further exploring this partnership and engaging in detailed discussion about the proposed collaboration, the expected contributions of all the parties involved and the mechanism by which we can work together effectively to achieve our common goal. Given our historical ties to the region and our mission to promote sustainable development and community well-being, this partnership holds great importance to us.
“Please consider this letter as our expression of interest in partnering with RGS Group Holdings Limited and Truvisory PTY Ltd and working collaboratively to bring about the turnaround of Tongaat Hulett Limited which holds significant importance in our community,” read the letter.
Tongaat Hulett Limited spokesperson Heidi Geldenhuys confirmed that it was now a two-horse race between RGS and Vision Parties (Terris Group).
“The business rescue practitioners (BRPs) of Tongaat Hulett Limited have published updated business rescue plans for Tongaat Hulett Limited and its subsidiaries, Voermol Feeds and Tongaat Hulett Sugar SA.
“Following the publication of THL’s business rescue plan in May 2023 and the subsequent adjournment of the section 151 meeting of creditors, the BRPs have been working closely with interested and affected parties towards securing a new strategic equity partner.
“To provide creditors with the best possible outcome, the BRPs have published two business rescue plans that outline two separate proposals by entities/groupings referred to as RGS and the Vision Parties namely RGS – The RGS Group, a Mozambique conglomerate and The Vision Parties – Terris Sugar, Guma, Remoggo and Almoiz,” said Geldenhuys.
The Vision Parties spokesperson Rob Bessinger refused to comment, saying they would do so when the timing was appropriate. Attempts to get either RGS or Ingonyama Holdings were unsuccessful.
The amended list of bidders was prompted by the disqualification of Tanzanian sugar giant, Kagera, announced as a new strategic equity partner in July. The group was said to have irregularly obtained a R2 billion funding promise from the Industrial Development Corporation (IDC) which later turned out to have been sanctioned by an official without the board’s approval.
Geldenhuys confirmed that in July 2023, Kagera Sugar was announced as the selected strategic equity partner. However, its proposal cannot be considered for various reasons, including a requirement in their proposal for exclusivity; their proposal has therefore not been included in an additional amended business rescue plan.
The disqualification of Kagera appeared to have paved the way for Gumede’s consortium to easily take over, but things changed when RGS entered the fray.
Geldenhuys confirmed that the voting on the deal will take place on Friday and creditors have been invited.
The list of creditors owed by Tongaat Hulett has been added with the court victory last week where Tongaat Hulett Limited lost a case to the SA Sugar Association (Sasa). The court ruled in favour of Sasa and that Tongaat Hulett owed the entity R1.5 billion.
Sasa is the regulatory body of the sugar industry.
Tongaat Hulett, which also has operations in Botswana, Zimbabwe and Mozambique, entered voluntary business rescue on October 27, 2022, after a series of failed restructuring plans.
Last year seven former Tongaat Hulett executives were charged with fraud amounting to R3.5 billion which drove the company to the brink of collapse and put close to 40 000 jobs on the line.
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Daily News