The Mozambique-based RGS investor consortium, one of two bidders for the financially stricken Tongaat Hulett, has withdrawn its bid just a day ahead of a crucial vote at a meeting of creditors scheduled for today.
Tongaat’s business rescue practitioners said in a notice yesterday the RGS Transactions Business Rescue Plan had been withdrawn by RGS’ board and would no longer participate in the creditors meeting.
“Accordingly, today’s meeting will proceed on the basis that only the Vision Transactions Business Rescue Plan will be considered,” the statement said.
Tongaat’s business rescue plan has been controversial. For example, the business rescue practitioners six months ago accepted a claimed fraudulent letter from a Tanzanian company, Kagera Sugar, and approved it as a strategic equity partner.
Meanwhile, according to reports, RGS withdrew its bid because it believed the business rescue practitioners were unduly favouring the Vision bid.
RGS’ plan had involved the acquisition of Tongaat’s debt, and converting that into equity.
The Vision consortium is tied to businessman Robert Gumede, with Mauritius-registered companies Terris, Guma, Remoggoa, and Almoiz, which is registered in the United Arab Emirates.
Essentially, the Vision group plans to buy out the about R7.7 billion lender claims against Tongaat, maintain the listing and operations of southern Africa’s biggest sugar producer, as well as enable existing shareholders to retain a minority stake.
Tongaat said the meeting agenda for today circulated on December 30, 2023 would continue to apply, on the basis however that every reference made to RGS would no longer apply.
Tongaat was placed in business rescue in October 2022 when it emerged key former executives had allegedly manipulated accounts for years and after new management failed to right the group after difficulties experienced through the Covid pandemic.