Tongaat crisis: Small farmers get money for Sept, but 300 bigger growers left unpaid | Fin24

Tongaat Hulett produces around 43% of South Africa’s sugar.

Small-scale
farmers who supply the Tongaat Hulett mills at Felixton, Amatikulu and
Maidstone in KwaZulu-Natal have now been paid for sugar cane delivered in
September.

The
company, which was placed in business rescue on October 27th, missed a deadline
to pay R401 million for cane delivered by about 4 300 growers.

But
some 300 commercial growers have not yet been paid, according to the association.
This is putting almost 15 000 jobs at risk as these farmers employ the vast
majority of the area’s cane farm workers, it said in a statement on Saturday.

Tongaat
entered business rescue after disagreeing with lenders about its
restructuring plan. The group has a debt burden of more than R6 billion.

The
association raised concerns about Tongaat Hulett’s ability to “make
timeous payments of more than R345 million at the end of November for the more
than 570 000 tons of cane delivered in October.”

“It
is also critical that clarity is provided on plans for the remainder of the
season, and to try to secure the future of Tongaat Hulett for the sake of the
thousands of livelihoods dependent on cane growing in the north coast of
KwaZulu-Natal.”

The
association is in negotiations with Tongaat’s business rescue practitioners to
prioritise payments to commercial growers, which will enable payments to other companies
including contractors, haulier companies and input suppliers.

Tongaat,
the country’s largest sugar producer, has been hit by an accounting scandal with
accusations that it inflated its financial position by R12 billion from 2011 to
2018. Its shares are currently suspended on the JSE.

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