DURBAN – Tongaat Hulett suffered a reduction of equity to the value of R11.89 billion as a result of impairments of R4bn, including the derecognition of expropriated land in Zimbabwe and R3bn of deferred tax assets that have not been taken into account in the past.
The agriculture and agri-processing company was forced to restate its financials after a PricewaterhouseCoopers (PwC) forensic investigation begun in March confirmed that senior group executives, including chief executive Peter Staude and nine others, had overstated assets and profits by using “undesirable accounting practices”.
The R11.89bn reduction in equity was restated from the anticipated reduction of between R3.5bn and R4.5bn the agriculture and agri-processing company estimated in May as a result of overstatement in its revenue and profits.
Tongaat said the process has been encouraging and its core business remains strong with positive cash flows from operating activities and strong margins at an operational profit level.
“Our investment case is supported by our lenders, with whom we have signed debt refinancing agreements,” the group said.