Sale of Tongaat Hulett starch business to go ahead
Rothschild & Co's ruling that an MAC has not occurred means the transaction can go ahead.
Tongaat Hulett has announced that the sale of its starch business to Barloworld will go ahead after independent third-party Rothschild & Co declared that a material adverse change (MAC) has not occurred.
Tongaat CEO Gavin Hudson said he was pleased this had been confirmed. “Throughout this process, we have continued to close out workstreams to meet our other obligations under the agreement reached with Barloworld in February, so that we can conclude the sale and move forward.”
The R5.35 billion transaction is expected to be finalised by the end of October with the starch business transferring to Barloworld from 1 November.
“Starch is a great business and Barloworld is fortunate to be buying such a valuable asset with excellent people,” Gavin said. “However, the rationale for the sale remains unchanged – it will help us to continue meeting our debt reduction targets. Tongaat is a high potential business with a significant asset base, and this decision will ensure that our focus remains on bedding down the turnaround of our organisation.”
He added that Tongaat would collaborate with Barloworld to close the starch transaction as soon as possible now that the issue of the MAC dispute was behind them.
“The sale of starch will position the group for longer-term sustainability as we deliver on our strategic business partnerships that will step-change our transformation initiatives, protect employee jobs and help support the economies of the countries in which we operate,” he concluded.