as having dented sugar prices and cash flows, limiting the availability of surplus cash for dividend distribution, while the repatriation of funds from Mozambique is prohibited by the in-country debt agreements.
“This position has been exacerbated by delays experienced in the recapitalisation of the company, particularly the planned equity capital raise [rights issue] which failed in June 2022, due to regulatory and other requirements.” Tongaat has a R1.5-billion working capital shortfall: on 29 July 2022, its lenders advanced a new short-term borrowing facility of R600-million, which is now due for repayment. The lenders have told the 130-year-old sugar producer that they are unable to support its restructuring plan or to provide the additional funding required, calling in the debt.
Tongaat Hulett’s Botswana, Mozambique and Zimbabwe sugar operations are not financially distressed and are unaffected.
Another company driven into the ground.