Tongaat Hulett: Crisis in South Africa will not affect operations in Mozambique – Diário Económico

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Tongaat Hulett: Crisis in South Africa will not affect operations in Mozambique – Diário Económico

1:46 CAT | 07 Nov 2022

FILE - For illustration purposes only . Mafambisse sugar mill in Sofala province, Mozambique. [File photo: DW]

Tongaat Hulett, the South African multinational that conducts sugar production at Mafambisse, in Sofala, and Xinavane, in Maputo province, says that the business rescue process underway in South Africa will not compromise its operations in Mozambique.

The rescue action results from the fact that the company remains unable to settle debts with some of its creditors.

In a press release quoted by Notícias, Tongaat Hulett explains that most of its debt (about 87%) is supported by cash flow from its South African sugar trading operations, real estate and operational support fees received from its non-South African sugar mills.

“Tongaat Hulett’s Botswana, Mozambique and Zimbabwe sugar operations are not financially distressed and therefore will presently continue trading in the ordinary course. These three businesses are funded independently from the Company and should be largely unaffected by the adverse circumstances affecting the Company,” a communique from Tongaat Hulett reads.

In July of this year, Tongaat Hulett had announced that it remains focused on a financial restructuring plan, to be subsequently presented to the Board of Directors for approval.

It is believed that the approval of this plan will pave the way for improving liquidity levels and reducing Tongaat’s debt to sustainable levels.

The administration of the Tongaat Hulett group, which is the largest sugar producer in Mozambique, does not provide numbers as to the debt However, it makes it clear that both managers and auditors need more certainty around debt refinancing and balance sheet restructuring.

Practically, this meant that Tongaat did not disclose its results for the financial year beginning on 31 March 2021 and ending on 31 July 2022, as required by the Johannesburg Stock Exchange (JSE).

Therefore, “a longer-term financial solution is required for Tongaat Hulett’s audited annual financial statements to be finalised, and this is largely dependent on the outcome of the restructuring plan,” the statement reads.

Source: Diário Económico