DURBAN – Sugar producer Tongaat Hulett said on Tuesday that it had sold its 51 percent stake in Tongaat Hulett Namibia (THN) to Bokomo for R220 million to reduce its debt.
The group said the board decided to offload the business as it was not part of its core assets.
It said the disposal would allow the Namibian business to grow into new areas while facilitating Tongaat Hulett’s access to the market through long-term sugar and related products supply agreements concluded with Bokomo.
“Tongaat Hulett, as 51 percent beneficial owner of the seller, will ultimately share in 51 percent of the proceeds from the sale, and assuming no post-closing adjustments are made to the purchase price, 51 percent of the proceeds will equate to R112m before deductions for taxes and transaction costs are made,” Tongaat said.
Tongaat Hulett said the transaction was conditional on certain conditions, which include the Namibian Competition Commission approval and the completion of a due diligence investigation into the Namibian business to the satisfaction of Bokomo by no later than November 30.
The group said the investigation was largely complete and the process for filing with the Namibian Competition Commission is under way.