High Court clears path for Tongaat Hulett’s business rescue

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RGS approached the court seeking to stop the implementation of THL’s adopted business rescue plan. They argued that the sale of assets under the plan was unlawful. However, the court disagreed, dismissing the application with costs, including the fees for two legal counsels where used.

Justice ME Nkosi found that RGS failed to prove the urgency of its case or justify the need for an interdict. In his judgment, he noted:
"… if RGS was genuinely concerned about the asset sale being unlawful and/or in contravention of section s150 of the Companies Act, it ought to have interdicted the BRPs from tabling that Plan for consideration at the creditors' meeting held on 10 and 11 January 2024."

The judge concluded that RGS did not meet the requirements for an interim interdict, effectively clearing the way for the BRPs to proceed with implementing the rescue plan.

What's next for RGS and Part B of the application?

While the court ruled against RGS on Part A, Part B of their application is still pending. The judge granted RGS permission to update its founding affidavit. Meanwhile, the BRPs and THL have been allowed to submit further affidavits if RGS decides to pursue Part B.

Despite attempts to derail the process, THL’s business rescue remains on track. The BRPs are pressing ahead with the plan, which is now in its final stages. The transfer of Tongaat’s assets to Vision Investments is expected to be completed within 2025.

Key progress points include:

Sale agreements finalised: All necessary agreements under the business rescue plan are in place, including the sale of:

• South African assets to Vision Sugar South Africa Proprietary Limited.
• Foreign subsidiaries to Ball Foundry Holdings Limited.

Competition Commission approvals: Clearances have been obtained in all jurisdictions except Zimbabwe, which is anticipated soon.

Leadership for the future: Gavin Dalgleish, a respected figure in the sugar industry, has been appointed as Vision's new CEO, showing confidence in THL’s future and its exit from business rescue.