GrowerCo estimates that creditors could realise R3 billion to R4.5bn if Tongaat Hulett is sold and operated as a going concern, against as little as R1bn to R1.5bn in a liquidation, argues the writer.
Pratish Sharma
The recent announcement of a grower-led initiative as a possible solution to the Tongaat Hulett liquidation crisis has been more than a decade in the making. And with the court hearing to determine whether the 134-year old company should be liquidated or not, the intent and thinking behind GrowerCo has never been more relevant, or urgent.
Sugarcane grower leaders first conceived and modelled an early iteration of a grower-owned milling vehicle as far back as 2012, but successive shifts in industry and market dynamics meant the moment to implement it never arrived.
After Tongaat Hulett entered business rescue in 2022, it became clear to sugarcane growers that a credible, grower-anchored vehicle could exist to acquire and operate the company as a going concern should other bids fail to deliver. It is a solution that has been envisioned, refined and held in readiness over many years. The current structure and approach, along with the entities formally registered through the Companies and Intellectual Property Commission (CIPC), were constituted in 2023.
