The Supreme Court of Appeal has ruled that Tongaat Hulett cannot suspend payments to the South African Sugar Association during its business rescue, increasing financial pressures. This decision comes as the Vision Group works to finalize its acquisition by refinancing Industrial Development Corporation funding. The ruling treats industry levies as statutory obligations rather than negotiable contracts.
Tongaat Hulett Limited, a major sugar producer, has faced ongoing challenges in its business rescue process that began in late 2022. In December 2025, the Supreme Court of Appeal dismissed the company's attempt to pause payments to the South African Sugar Association (Sasa). Judge John Smith ruled that these levies are liabilities imposed by statute, falling outside the protections of section 136(2) of the Companies Act. As a result, the business rescue practitioners (BRPs) must treat Sasa as a regulatory authority, not a standard creditor.
The Vision Group, the approved buyer, settled the company's R8-billion bank debts with lenders including Absa, Nedbank, and Investec by 9 May 2025. However, the deal's completion depends on refinancing the Industrial Development Corporation's (IDC) post-commencement finance facility, which provided over R1.4-billion for maintenance. A December 2025 status report from the BRPs indicated that this refinancing is taking longer than expected, with negotiations ongoing between Vision and the IDC.
THL stated that the BRPs are reviewing the SCA judgment and taking legal advice, noting that the rescue plan already accounts for the Sasa payments. Sasa executive director Sifiso Mhlaba welcomed the ruling, saying, “The most important aspect of the ruling is that it confirms and reaffirms the levy obligation by industry members. This is crucial for the sustainability of the critical sector, which is the bedrock of rural economies in the provinces of KwaZulu-Natal and Mpumalanga.”
Complicating matters, rival bidder RGS Group Holdings has pursued legal actions, including an urgent interdict struck off the court roll in September 2025 for lack of urgency. The BRPs described these as vexatious litigation creating uncertainty. Operationally, the company's mills in KwaZulu-Natal are prepared for the 2025/26 season after R1.45-billion in investments. New CEO Gavin Dalgleish, appointed in June 2025, brings experience from Illovo Sugar Africa.
The company operates in a tough market, with a surge in sugar imports from Eswatini pressuring prices and volumes. Monthly funding approvals remain critical, and the BRPs assess that THL has a reasonable prospect of rescue despite these hurdles.