RCL to withdraw Tongaat interdict

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JSE-listed food producer RCL Foods, which on Friday filed an application to interdict one of Tongaat Hulett’s revised rescue plans from being voted on at a meeting on Wednesday, said on Sunday it will withdraw its court case. This follows an agreement with the business rescue practitioners (BRPs) to tweak the plan. 

The maker of Selati sugar was responding to a Business Times article that it had filed an interdict to stop the meeting where a plan by Vision Group — made up of investors from South Africa, Mauritius and the United Arab Emirates — was going to be presented to creditors to be voted on. Another bidder whose plan will also be presented at Wednesday’s meeting is Mozambican group RGS. 

RCL said Vision’s revised plan was unlawful as it did not provide for settlement of Tongaat’s statutory obligations to pay levies owed to the sugar industry’s regulatory body, the South African Sugar Association (Sasa), as directed in a recent court judgment.

RCL said on Sunday it filed an application to interdict voting on the Vision plan at the upcoming Tongaat Hulett meeting.

“Following our application, RCL Foods engaged with the BRPs who agreed to changes to the Vision plan, as a result of which our application will be withdrawn,” it said.

In December, the court ruled that the initial rescue plans by RGS and Vision group must not be voted on as they did not make provision for the payments owed to Sasa. The judge also said the business rescue practitioners must convene the meeting by no later than January 11. The ruling was in relation to an interdict brought by RCL and Sasa in response to a previous judgment that dismissed with costs attempts by the BRPs to avoid settling R1bn in sugar industry levies owed to Sasa members. 

“While the legal process has resolved our concerns about the lawfulness of the Vision plan, we remain concerned about the impact it will have on growers and millers. 

“The Vision plan assumes that Sasa will not be paid for at least three years and in contrast the RGS plan provides for immediate settlement of the Sasa claim amount while not leaving any other affected party worse off. We hold the firm view that it is not justifiable to force growers and millers to bear the cost of Tongaat’s business rescue through delayed payment,” RCL said on Sunday.

Tongaat was placed in business rescue in October 2022 after its funders pulled the plug when it emerged that key former executives had allegedly manipulated accounts for years. The company owes banks about R8bn.

Vision stated in its plan the amount owed to Sasa is R525m. 

RCL Foods said it “remains committed to the future of the South African sugar industry. We have taken legal action in the best interest of the broader sugar industry including our small-scale growers who are not in a position to protect their interests through litigation.”

The company, which is majority owned by Johann Rupert’s investment group Remgro, believes Tongaat’s “future viability is critical but, at the same time, that it is vital to ensure that the business rescue process does not undermine the entire industry”.



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