THE shock liquidation filing against South Africa’s Tongaat Hulett Limited (Tongaat) last week followed the collapse of its R5,9 billion (US$330,05 million) debt-to-asset sale to the Vision Group (Vision), which had included the proposed transfer of its regional subsidiaries.
On February 12, Tongaat SA’s business rescue practitioners (BRPs) applied for provisional liquidation after concluding that the rescue plan was no longer implementable.
It entered voluntary business rescue in October 2022 after total claims and debt ballooned to about R13 billion (US$721,6 million), a figure later confirmed at R10,4 billion (US$634,53 million).
Following an extensive bidding process, Vision, a South African consortium, was selected in January 2024 to acquire Tongaat’s business and assets under the agreed debt-to-asset rescue deal.
Tongaat owes roughly 1 000 creditors, with all its assets pledged as security. In its last recorded financial statement for the year ended March 31, 2021, the group reported total assets valued at R13,27 billion (US$838,42 million).
Tongaat is a South African agriculture and agri-processing firm operating in Zimbabwe through Triangle Limited (Triangle), which it wholly owns, and Hippo Valley Estates Limited, in which Triangle holds a 50,32% stake.
However, Hippo and Triangle moved swiftly to reassure the market that the liquidation application against their South African parent would not affect local operations.
A day after the filing, Hippo’s market capitalisation rose by US$3,01 million, reflecting investor confidence.
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“We recognise that news of Tongaat Hulett Limited’s liquidation in South Africa may cause concern about our operations here in Zimbabwe. We want to provide clarity and assurance,” Daliah Garwe, head of corporate and industry affairs, said in a statement.
“The joint business rescue practitioners of Tongaat Hulett Limited (THL) have applied to the High Court of South Africa for an order discontinuing the company’s business rescue proceedings and placing THL (South African operations) into provisional liquidation.”
Tongaat South Africa said in the statement this week: “The implementation of the asset transaction in accordance with the plan remained an ongoing process, which contemplated the sale of the company’s business and assets as a going concern, as a group, to the Vision Parties (Vision) being the sale of — inter alia — the South African assets, including the South African sugar business and head office; and the shares in and claims against each of the subsidiaries in Zimbabwe, Mozambique, and Botswana (collectively, the sale agreements)”.
It further stated that: “The parties to the transaction continued working towards the implementation of the asset transaction and refinancing of the Industrial Development Corporation (IDC) post-commencement finance facility in the shortest possible timeframe”.
The refinancing relates to funding extended by the IDC during business rescue to support working capital and operations.
The IDC is a South African state-owned development finance institution mandated to drive job-creating industrialisation in line with national policy, while funding inclusive growth and maintaining long-term financial sustainability.
However, a surge in sugar imports into South Africa over the nine months to December 2025, compared to the same period in 2024, left locally produced sugar struggling to compete.
That pricing pressure constrained Tongaat’s revenue generation and weakened its ability to meet obligations under the rescue plan.
“One of the main requirements of the adopted business rescue plan and the Sale of Business Transaction remained the refinancing and migration of the IDC post-commencement finance facility from THL (Tongaat) to a revolving credit facility with Vision,” Tongaat said.
“The negotiations between Vision and IDC aimed at fulfilling this condition were ongoing. These negotiations took longer than originally anticipated.
“In this regard, the IDC appointed advisors to assist with actively engaging on funding proposals for consideration by the IDC.”
Negotiations between Vision and the IDC to meet this condition dragged on longer than expected, with the IDC appointing advisors to engage on funding proposals under consideration.
Tongaat revealed that an IDC board meeting held on January 29 deliberated on matters relating to the implementation of the business rescue plan and the Vision transaction, but no final decision was reached.
“The sale agreements were extended by a week to February 7, 2026 to enable the IDC advisor process to progress and inform the likelihood of IDC/Vision agreement on the way forward. As the sale agreements approached expiry, the IDC and its advisers were actively engaged in finalising feedback on funding proposals,” the firm said.
“The BRPs requested a short extension to allow the IDC to conclude its processes and to consider the proposals made by Vision to the IDC. Vision considered the request and indicated that it was prepared to grant an extension, subject to the imposition of new, material conditions.
“The BRPs determined that these conditions were not acceptable, as their fulfilment would have run counter to the agreed methodology for implementing the approved BR Plan, exposed THL to significant commercial risk, and potentially placed THL in breach of its contractual undertakings to third parties.”
Due to Vision’s refusal to unconditionally extend the closing date and the non-fulfilment of the plan’s conditions, the sale agreements lapsed on February 7, resulting in the business rescue plan becoming unimplementable. This led to the filing for liquidation.
