Tongaat's creditors approve business rescue plan for property development arm
Creditors of embattled sugar producer Tongaat Hulett on Tuesday almost unanimously voted in favour of the rescue plan for the company's property arm, which is to be wound down.
With 92% of creditors voting, 99.8% voted in favour, the business rescue practitioners said. The plan required at least 75% support of those voting, with secured creditors, in aggregate, expected to receive distributions of around 7c to the rand – though the practitioners had said this is compared to 2.5c forecast if the company went into liquidation.
Tongaat's lenders had claims totalling R7.7-billion against Tongaat Hulett Developments, which managed and developed Tongaat's property interests. The property arm has provided guarantees for group level debt since 2007, meaning it is liable for Tongaat's debt as a whole.
The sugar group had entered into business rescue in October and the property arm is just the first part of the business to publish its plan, which entails a structured wind down of the company, its operations and the sale of its property assets.
In March, creditors had also approved an extension of the publication of Tongaat's business rescue plan - including for its SA sugar operation and feeds division - until the end of May.
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