Tongaat details plan to sell Mozambique business to Vision

Tongaat Hulett will sell its Mozambique operations to the group of investors led by billionaire Robert Gumede as part of a broader strategy to stave off oblivion under the business rescue plan adopted last year.

The agreement, signed on Monday and subject to regulatory approval, states that the purchase price will be determined by an independent valuer, with the final amount settled through a setoff against lender group claims. 

Vision, led by Gumede, the founder of Gijima Technologies, is buying Tongaat’s R8.5bn debt from lenders and will convert most of it into equity.

Vision intends to acquire all of Tongaat’s shares in three Mozambican entities, including 85% of Tongaat Hulett Açucareira de Moçambique, with the Mozambique government holding the remaining ownership.

Last week, Vision Group announced the appointment of former Illovo CEO Gavin Dalgleish as its CEO. His start date is in April coinciding with the closure of the assets transfer.

In 2022, Tongaat entered business rescue after a PwC investigation exposed huge accounting fraud. The probe revealed senior executives had artificially inflated the company’s profits, resulting in writedowns and leaving it unable to fulfil its debt obligations. Creditors then called in the debt, forcing the company into business rescue.

Meanwhile, RGS, a bidder from Mozambique, has taken Vision to court, claiming that the business rescue practitioners failed to fulfil their duties and obligations, and did not act in the best interests of Tongaat and its stakeholders by selecting Vision as the winning bidder.

The Vision Group believes its consortium is best suited to address the specific needs of transforming Tongaat. Vision’s partners, which include Terris, Remoggo and Guma, are providing the necessary capital investment and resources to drive the company’s transformation.

Another partner, Pakistan-based Almoiz Industries, has expertise in modernising agro-processing businesses and experience in expanding into new markets. 

Correction: 13 February 2025:
Republished to clarify in the introduction that the deal is part of broader asset transfer under the business rescue plan.

majavun@businesslive.co.za