A consortium that has taken over ailing sugar giant Tongaat Hulett Limited (THL) was allegedly approached by a shareholder to pay US$32 million (R600 million) in exchange for its vote.
According to industry sources with insight into the matter, a new shareholder who had acquired a stake from one of THL’s original shareholders approached the Robert Gumede-led Vision Investments with the offer before shareholders voted on Vision’s debt-to equity swap proposal on Thursday last week.
Attempt was an extortion
Vision rejected the approach, viewing it as an extortion. THL shareholders voted against the debt to equity swap last week.
This leaves Vision to move forward with its plans without the legacy obligations of the company’s troubled past.
The shareholders had two options: vote for the debt to equity swap and retain 2.7% of the JSE-listed shares or reject it. They chose the second option, which left them empty-handed.
Two Industry sources close to the THL saga blamed a certain shareholder, whose name is known to People’s Eye, as the chief antagonist in the blocking of a better future for the company, its stakeholders, shareholders, sugarcane growers and employees.
“Does he actually care an iota as to what happens to all other stakeholders in Tongaat Hulett? THL accumulated the R8.5bn debt under the watchful eye of the same shareholders who voted against the Lender of record (Vision) trying to broker a win-win solution for all stakeholders,” said a source.
Resistance against takeover
The resistance against Vision’s take over manifested when Vision was informed that that a party has acquired 15% shareholding of Rudlands. People’s Eye understands that the new shareholder called Vision and demanded US $32million (R600million) to vote in favour of the THL Business Rescue resolutions .
Vision rejected the proposal as an extortion because the THL’s shares as per the business rescue and approved business plan are worth minus zero.
Mozambican company, RGS Holdings, which faces fraud charges for allegedly falsifying an ABSA proof of funds worth R2billion is seemingly not giving up as People’s Eye has seen another letter from RGS proposing to inject R8.5billion into THL subject to RGS. RGS claims to have funding from Afreximbank.
RGS has been accused of hiring THL creditor, Powertrans’ court application to collapse the THL business rescue.
The debt-to-equity swap would have thrown THL a lifeline and prepared ground for it to move out of business rescue, stay listed on the JSE and embark on a path of profitability and stability, preserving jobs in all jurisdictions – Botswana, Zimbabwe, Mozambique and South Africa.
On Thursday, after the shareholders’ vote, Vision Investments – a consortium made up of mogul Robert Gumede’s Guma Agri, Rute Moyo of Remoggo, Amre Youness of Terris Sugar and Nauman Khan of Almoiz – revealed its way forward.
The company said that debt-for-equity swap would result in THL being recapitalised with a much stronger balance sheet to exit business rescue and grow.
Vision Investment said that the shareholders’ vote would not stop the implementation of the plan that THL creditors approved in January 2024.
Takeover won’t be derailed
The source said that chief antagonist’s attempt to minimise the value of the debt owed to the lenders did not absolve the company of its obligation.
“He and his associates have had five and half years to put their money where their mouths are and they have failed to do so, including at the shareholders meeting on Thursday. All he has done is make accusations and criticise concrete proposals and now they have run out of runway,” he said.
Added the source: “He is attempting to rule from the grave. He is trying to behave like a creditor by revising the terms of the creditor approved plan while trying to propose another business plan when he has no standing now – he voted himself out of that yesterday (Thursday).
“The law is clear that the company is in business rescue because it cannot meet its obligations to its creditors. There is a valid and continuing business rescue plan and Vision is contracted to execute it…”
Putting in good money
Another source clarified that Vision, together with IDC, were the only entities that have put good money.
“Everyone is happy to acknowledge the role that this particular shareholder played in unearthing the fraud at THL, but we are now in a situation where THL livelihoods are being threatened each day that the saga stretches out,” he said.
He dismissed claims that Vision had no money for the transaction. “They would like everyone to believe that a consortium of 11 SA lenders would allow Vision to access the debt package and convert it when they were not invested in it. It would seem that they have no respect for entrepreneurs like Robert Gumede, Rute Moyo, Nauman Khan and Amre Youness.” – People’s Eye
