Ingonyama Holdings, a subsidiary of KwaZulu’s Ingonyama Trust, has joined forces with Mozambican conglomerate RGS Group Holdings in a bid to acquire a controlling stake in Tongaat Hulett Limited (THL), which is currently facing financial challenges.
The updated list of bidders, published by business rescue practitioners, now reveals a two-way competition between RGS Group Holdings and a consortium led by Mpumalanga businessman Robert Gumede. Gumede’s consortium, named Terris, includes business figures from Zimbabwe and Pakistan under the umbrella known as “The Vision Parties.”
Last month, the Terris consortium reportedly moved closer to securing the deal by securing a R7.9 billion loan, impressing the business rescue practitioners. The final voting on the deal is expected to take place on Friday.
Ingonyama Holdings, affiliated with the Ingonyama Trust, has reportedly responded positively to a proposal from RGS Group Holdings to collaborate in acquiring a controlling stake in Tongaat Hulett. The move comes amid concerns about financial mismanagement and potential favoritism.
In a letter from Ingonyama Holdings to RGS Group, executive director Lucas Mkhwanazi expressed gratitude for considering them as potential partners. The letter highlighted the alignment of values between the two entities, emphasizing RGS Group’s track record, experience, and commitment to community development.
Tongaat Hulett Limited spokesperson Heidi Geldenhuys confirmed that the bidding process has narrowed down to a two-horse race between RGS and the Vision Parties (Terris Group). The business rescue practitioners have published two separate business rescue plans outlining proposals from these entities.
The financial challenges faced by Tongaat Hulett have prompted its entry into voluntary business rescue in October 2022. The company, with operations in Botswana, Zimbabwe, and Mozambique, has been grappling with restructuring and financial difficulties.
Last year, seven former Tongaat Hulett executives were charged with fraud amounting to R3.5 billion, contributing to the company’s precarious financial situation. The upcoming vote on the deal will determine the strategic equity partner for Tongaat Hulett, marking a critical phase in the company’s efforts to navigate its financial challenges.