Lenders extend new credit lines to Tongaat

Tongaat will release 'key findings' related to PwC's forensic investigation into its financials next Friday.

Tongaat Hulett’s SA lenders have agreed to make new credit facilities available to it, the sugar producer says.

The creditors have agreed in principle to make new senior term loan, senior revolving credit and overdraft facilities available.

“The new SA facilities will be used primarily to refinance amounts owing to the SA lenders under existing facilities and to fund general corporate and working capital requirements,” Tongaat said in a statement on Monday.

The embattled company has been hit by an accounting scandal that has forced it to restate its financials and ask for its shares to be suspended. It has been in debt restructuring talks with SA and Mozambican creditors.

A successful restructuring of its debt is seen as critical to ensure the long-term sustainability of the company. But the deal announced on Monday goes above and beyond a debt standstill, or a break from payments, which the company was first negotiating.

In terms of the latest agreement, there are specific timelines within which repayments must be made on the debt owing to the lenders and contemplates that the company will fund these repayments out of asset disposals and equity capital raisings.

Tongaat said it is making progress with its turnaround plan, which includes the disposal of noncore assets.

The company said negotiations on the debt restructuring in Mozambique continue to proceed positively.

Tongaat will release the “key findings” related to PwC’s forensic investigation into the group’s financials next Friday.

The group is also expected to finally release its restated results for its 2018 financial year and 2019 results in the second week of December. Tongaat confirmed this in Sens statement on the JSE late on Monday, which also included a progress update on its debt negotiations with lenders.