ROB ROSE: Why the banks pulled the plug on Tongaat
Africa’s largest sugar producer is in business rescue and its banks clearly need convincing that it’s worth saving
Tongaat CEO Gavin Hudson evidently thought he had the “restructuring plan” for his ailing sugar company sewn up, when he announced it publicly two weeks ago. So it must have been a blue Monday for Hudson when, on October 21, he got a curt response from Tongaat’s banks, effectively saying: we don’t accept your revival plan, and we need you to repay the R600m loan given last July immediately.
In that moment, all Tongaat’s travails of the past four years — a R12bn fraud second only to Steinhoff in scope, a sugar market asphyxiated by cheap imports, riots that cost it R158m, and a huge R11.7bn debt — coalesced into one imperative: keeping the 130-year-old company alive...
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