BRPs short-list 8 bidders for Tongaat Hulett assets

The Tongaat Hulett business rescue practitioners (BRPs) received many approaches from potential strategic equity partners (SEPs) interested in Tongaat Hulett Limited (THL) and its associated businesses.

 The BRPs this week announced they had narrowed the field to eight potential SEPs.

In a statement, they said due diligence processes were well advanced, and expected to receive final offers this month.

 “We have made significant progress towards securing a potential SEP with a view to developing a long-term sustainable business solution,” the BRPs said.

 The BRPs required the selected SEPs to demonstrate the following criteria:

• Interest in THL as a whole or in the South African sugar business.
• Technical expertise and operational ability.
• Balance sheet strength and substantial access to funding.
• A plausible business case for the future of the THL or the South African sugar business.
• Valuation of the relevant assets that demonstrates a likely ability to conclude a transaction.

 Tongaat Hulett and its subsidiaries have been in business rescue since the end of October last year.

 The practitioners said they were aware of the enormous social impact of the businesses under their care.

 The BRPs said the SEPs process could result in various corporate restructurings.

For instance, it was possible that one or more SEPs, either with or without participation by the Industrial Development Corporation, may:

• Acquire all the THL’s sugar assets and businesses.
• Acquire only the core South African sugar businesses, leaving the African assets [sugar operations in Zimbabwe, Mozambique and Botswana] to be disposed of separately.
• Acquire specific assets or businesses.
• Or embark on a combination or permutation of the above three scenarios.

 If creditors approve the THL business rescue plan, the company will delist from the JSE.

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