SOUTH AFRICA – Debt ridden Tongaat Hulett has approached the Johannesburg Stock Exchange (JSE) for a temporary suspension of its listing, saying it will not be able to publish its financials on time, again.
The company was meant to publish its results for the year ended 31 March 2022 by 30 June but was unable to do so, and it was then granted an extension until 31 July.
However, Tongaat says it will not meet the second deadline either because its restructuring plan has not been finalised.
It is also in “final negotiations with the South African lender group to replace the company’s seasonal overdraft facility with a larger short-term ‘borrowing base’ liquidity facility”.
“Due to the delay in the finalisation and publication of the provisional 2022 financial statements and the audited 2022 financial statements, the board has voluntarily approached the JSE and requested a temporary suspension of the company’s shares.
“While the board is conscious that some investors and potential investors might prefer retaining the discretion to trade, the board’s view is that a temporary suspension of trading it is in the best interests of Tongaat Hulett and its stakeholders and serves to protect investors and potential investors,” Tongaat said in a statement on Friday.
Tongaat is struggling following years of irregularities that have left it with a R6.8bn pile of debt while former directors, including ex-CEO Peter Staude, face fraud charges.
Last month, the embattled group established a restructuring committee to oversee and approve negotiations and development of a plan to reduce debt to sustainable levels, and to improve the liquidity of the group.
Piers Marsden was appointed as chief restructuring officer and chairperson of the committee, and its other members include non-executive directors Jean Nel, Andile Sangqu, Graham Clark and chief financial officer Rob Aitken.
The committee was formed after its recapitalization deal with Mauritius-based Magister Investments was called off.
In 2021, Magister committed to underwriting R2 billion (US$126m) of Tongaat’s R5 billion (US$316m) rights offer. The deal was meant to be finalised by the end of June, once certain conditions were fulfilled.
“Tongaat Hulett has informed shareholders that the company’s newly established restructuring committee will present the restructuring plan to the Tongaat board by 30 September 2022.
“The comprehensive restructuring plan seeks to improve liquidity levels, reduce debt to sustainable levels and provide clarity on a way forward for the company to all stakeholders,” the company said.
The sugar manufacturer said a longer-term financial solution was required for Tongaat Hulett’s audited annual financial statements to be finalised, largely dependent on the outcome of the restructuring plan.
“While every effort is being made to finalise the restructuring plan as soon as possible, it is clear that neither the Provisional 2022 Financial Statements nor the Audited 2022 Financial Statements will be finalised by 31 July 2022.
“As a longer-term financial solution is required for the results to be released, Tongaat has applied to the JSE to have trading in its shares voluntarily suspended,” the company further said.
The JSE issued a Stock Exchange News Service (SENS) announcement confirming that it was considering the request for suspension received from the board and that it would communicate its decision as soon as possible.