South Africa’s sugar industry has already seen a 25% decline in production over 20 years, worsened by cheaper imports.
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The Durban High Court will be the scene of tense hearings Thursday and Friday as stakeholders including the government and Industrial Development Corporation (IDC) try to block the final liquidation of South Africa’s biggest sugar producer Tongaat Hulett.
The company entered business rescue in 2022 after years of financial distress caused by accounting irregularities, debt overload, and operational losses. Business Rescue Practitioners (BRPs) were appointed to restructure the debt and find investors to recapitalise the company, and the Vision Group was chosen.
But this stalled over funding guarantees and compliance conditions, and as the liquidity position worsened and creditors pressed for repayment, resulting in the BRPs filing for liquidation in early 2026.
The BRPs said in their latest update on the business rescue that until March 31, 2026, Tongaat continued to trade in difficult market conditions, and Vision Group, the IDC and the BRPs had continued to attempt to agree on the refinancing of a R2.3 billion Post-Commencement Financing (PCF) facility.
The IDC had subsequently said it would extend the PCF from March 31 to June 30, 2026, and that the facility would would be increased to R2.5bn, subject to IDC board approval and the conclusion of written agreements.
However, the BRPs said board resolutions and written agreements had not yet been finalised by March 31, and liquidity remained constrained. Collections, however, were robust, supporting short-term liquidity management.
Growers were expected to receive their final cane payments in full, including retention amounts, although these payments were structured in two tranches to manage liquidity pressures.
A limited amount for critical expenditure would be released to progress certain time-critical off-crop maintenance activities at the mills, which was necessary to ensure operational readiness for the upcoming season.
The situation had been worsened by sugar imports. Over 9 months to December 2025, imported sugar volumes had increased sharply, resulting in some local sugar having to be exported at lower prices and margins.
The application for liquidation by the BRP's is being opposed by the IDC and the Department of Trade, Industry and Competition, which will argue that Tongaat can still be restructured.
Gerhard Albertyn is one of the joint BRPs overseeing the ongoing financial restructuring of Tongaat Hulett. He serves alongside Trevor Murgatroyd and Peter van den Steen to manage the company's business rescue process, which began in October 2022 following a major accounting scandal.
The Vision Group’s proposal is effectively on hold pending the High Court decision on whether to liquidate Tongaat Hulett or restructure it.
Vision Group said in a statement on Tuesday they continue to actively pursue a negotiated resolution with the IDC.
“Proposals were tabled in February 2026, clarifications were provided the same day they were requested, follow-up communications were sent in March, and further proposals were advanced as recently as April 7, some 9 days before the Durban High Court hearing.”
“In one of those proposals, Vision offered the IDC a 40% equity stake in Vision Sugar South Africa as settlement of the PCF facility, a significant concession designed explicitly to unlock a path forward. The IDC has not responded to the detailed proposals,” the Vision Group said.
“Vision has never sought the liquidation of Tongaat Hulett. Vision is a consortium that invested materially in the rescue process, that acquired the lender group claims through a legitimate commercial transaction, and that has continued to engage with all relevant stakeholders, including government, the IDC, cane growers, and the BRPs, all in pursuit of a sustainable resolution.”
The Vision Group said also that its R11.7bn secured claim over Tongaat Hulett was legitimate.
The consortium, the SA Sugar Association, the Minister of Trade, Industry and Competition, the cane growers, and the IDC agree on one central point: that the liquidation of Tongaat Hulett be catastrophic in South Africa.
It would devastate over 15,000 small-scale growers, 435 commercial growers, and thousands of direct and indirect employees across KwaZulu-Natal. It would damage the rural economy and the broader sugar value chain in ways that would take a generation to repair.
The Vision Group said it has proposed structural industry reforms, not as an obstruction, but because evidence supports its assertion that Tongaat Hulett cannot be sustainably rescued without addressing systemic challenges facing the South African sugar industry, including cheap imports that have fundamentally altered its competitive dynamics.
BUSINESS REPORT