The Durban High Court has postponed the liquidation case against Tongaat Hulett after a last-minute funding agreement was reached, providing the company with a temporary lifeline until June.
Image: TUMI PAKKIES / Independent Newspapers
The Durban High Court has postponed the liquidation case against Tongaat Hulett after a last-minute funding agreement was reached, providing the company with a temporary lifeline until June.
This decision follows a last-minute agreement between the company's Business Rescue Practitioners (BRPs) and the Industrial Development Corporation (IDC) for R200 million in funding.
The supplementary affidavits detailing the IDC's proposed R200 million funding were filed two days before the hearing on Thursday, resulting in the temporary halt of the liquidation proceedings on Thursday morning, just before they were set to begin, IOL reported.
Advocate Arnold Subeal SC, representing the BRPs from Metis Strategic Advisors, informed the court that the new funding arrangement fundamentally altered the situation.
“IDC’s funding allows BRP to continue day-to-day operations, but it won’t last till the end of June,” he stated.
Subeal argued that the funding offered a breather until the end of June to determine if a successful rescue was still achievable.
The BRPs, who had previously argued in February that Tongaat could not be saved, reversed their stance and requested a postponement instead of proceeding with the arguments regarding the liquidation.
Defending the sudden change, Subeal requested a continuation date, pointing to the absence of alternative proposals from opposing parties. “I don't see anyone here today with a cheque book, just opposition and calling for the application to be dismissed,” he contended.
The postponement was supported by the Vision consortium, which is led by prominent businessman Robert Gumede, who holds R8 billion of Tongaat’s debt, represented by advocate Jonathan Blou SC.
“What this postponement does is give the company an immediate lifeline till June,” Blou said.
He added that the BRPs must use this time to present an alternative rescue plan.
However, he warned that patience was not unlimited. “There's got to be an end in sight, we support the postponement till June to see if there's an alternative that can be found.”
The RGS Consortium opposed the move, with advocate Ruan Kotze accusing the BRPs of procedural gamesmanship. Kotze criticized Vision. “The vision plan was stillborn. Vision doesn’t have funds to implement its own plans.”
Kotze added that RGS wanted to “keep their foot in the door to see what happens till the end of June.”
Abrina’s advocate, Daisy Dheoduth, offered pointed criticism to the court: “They can't have their cake and eat it... Can't put Humpty Dumpty together again.”
After hearing arguments from all parties, Judge Rithy Singh noted that the primary complaint had been the lack of funding under the unimplemented Vision business plan. She considered the court’s options, one of which allowed for adjournment in appropriate circumstances.
“From reading the papers before me, it would not be in the interests of stakeholders for Huletts, which in my view is the lifeline of this province, to be taken out of business rescue,” Judge Singh concluded.
She subsequently granted the postponement, rescheduling the liquidation hearing for 17 and 18 June.