The ‘Vision’ of the future for Tongaat Hulett

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JIMMY MOYAHA: Around seven years ago a company called Tongaat Hulett found itself in some financial trouble as a result of accounting irregularities.

These accounting irregularities would go on to cost shareholders a little over R12 billion and spin Tongaat Hulett into a nasty cycle that would ultimately result in the February 2026 decision by business rescue practitioners to file for its liquidation and potentially put almost a million livelihoods at risk.

This was until Vision’s co-founders, Rute Moyo and Robert Gumede, would step in and look to rescue Tongaat Hulett – and effectively rescue South Africa’s sugar and agricultural sector.

Fast forward to today. We are four months post the decision to file for liquidation. We know that there has been an announcement by the IDC, the Industrial Development Corporation of South Africa, that they would be looking to assist Vision Consortium to get Tongaat Hulett out of its current predicament and potentially save more than 250 000 jobs in the process.

We are going to look at this in a bit more detail with co-founder and principal at the Vision Group consortium. Mr Rute Moyo joins me on the line to see what we make of these developments.

Mr Moyo, lovely having you on the show. Thanks so much for taking the time. Let’s perhaps start our conversation where Vision Consortium entered the conversation around Tongaat Hulett around 2023. The business took the decision to come in and buy the debt of Tongaat Hulett and effectively make itself the largest creditor for Tongaat Hulett at the time. Let’s start the conversation there.

What was the thinking there from a business perspective? What did you, as the Vision Group Consortium, believe could be done here?

RUTE MOYO: Thank you Jimmy, and thanks for having us on the call, and thank you to your viewers as well.

Firstly, Jimmy, just for purposes of correction, it’s not just Vision that is coming to the rescue. I think the IDC is an essential and central part in the rescue of Tongaat – and has been for a while.

But let me put a little bit of context behind it. In about 2019, Vision at that time, made up of Gumede and me, made a bid for Tongaat assets – particularly in Zimbabwe and Botswana – after we learned that the Tongaat Group was in trouble owing to the financial irregularities that you’ve pointed out.

So Vision itself started the interest way back in 2019. At the same time, Yunus Ahmed [Bhanjee], who’s now a member of Vision, was also individually through the Terris [Consortium] chasing some of the assets.

We eventually got together in 2021/22 to bid collectively as the now constituted Vision Group.

What we had seen, to your question, is that the Tongaat group is a very central and essential agri-industrial entity.

By way of history, one of my first jobs, when I was actually an Anglo graduate trainee, was at one of the operations in Zimbabwe at Hippo Valley, way back in the ’80s. So I was already aware of the operations and how significant they were in the region at that time.

Fast forward to one of the [inaudible] members, Jon Cummings, who used to be a partner at McKinsey way back in the early 2000s and had done quite some work for Anglo American at Hippo Valley as well.

So we have a long-standing understanding of those assets which were brought to bear, and we thought there was an opportunity to do something about it – from 2019 all the way through to 2023 – when we then made a formal bid to participate in the … process with the business rescue practitioner at that time – all the way through to where we are today.

What we believe is that the assets themselves operationally were functioning reasonably well.

We think the managerial and accounting issues were a problem, but the core business operations themselves were running relatively well at an operating level in all the countries – Zimbabwe, Mozambique, Botswana and South Africa.

There were some challenges in all the areas from a regulatory point of view, but the core agri-processing business itself and the assets themselves we’ve always respected, and understood them to be in good nick but in need of a caring parent, as it were.

An active shareholder [role] is really what we thought was an opportunity and what we still see as an opportunity.

JIMMY MOYAHA: Mr Moyo, let’s take a look at the role of the Industrial Development Corporation. You touched on the fact that they are critical to this particular transaction, and perhaps to how it has been able to be structured going forward.

Initially the Vision Group had approached the IDC to assist it in finalising the refinancing of the transaction prior to liquidation – or prior to the business rescue practitioners filing for the provisional liquidation.

What changed from that initial requirement and proposal to the IDC to what we currently have now, which got the conversation over the line?

RUTE MOYO: A very important question, Jimmy. In May 2025 the IDC actually approved a loan facility for R4 billion for Vision to put into Tongaat at that time.

And so the discussion from May 2025 to date was around whether in fact it was a good idea for the company to carry debt.

Our viewpoint, Jimmy, is that this company, particularly the South African operations, cannot carry debt at this point in time – for a number of reasons.

The first reason is that we are very mindful that it’s the debt burden that brought the South African operations into business rescue, so we are generally just wary of it.

As entrepreneurs we’re not necessarily wary of debt per se; we just think that debt within the Tongaat context could be a time bomb.

Part of the reason is that the regulatory environment in South Africa still needs some work, and that work has started with government in the minister of industry, in particular, attending to the Sugar Master Plan.

But until the Sugar Master Plan in the regulatory framework around the Sugar Act is updated or reformed, we think there is risk in carrying debt.

And when you add on the issues around the tariffs and the tariff regime – which is being reviewed by Itac [International Trade Administration Commission] and the dtic [Department of Trade, Industry and Competition – we think that debt is not a good idea.

So the conversation we’ve been having with the IDC and where we’ve ended up is that Vision carrying a debt pile within Tongaat of about R12 billion and the IDC carrying R2.5 billion – this is the four [R4 billion] that they had offered us – we think that the best structure would be for both of us to take equity in Tongaat and eliminate all the debt that’s on the balance sheet right now.

[This will] give the company a chance to restate itself with a clean balance sheet, and restructure its operations leanly to provide a platform for a new owner and a new shareholding structure to come in, deal with government and the industry, reform the industry, as well as actually look at diversification as an opportunity for transforming the industry as well as the business itself.

That really is the core opportunity that we see. Clean up the balance sheet, restructure it, lower debt – if not no debt – and then give management a chance to really do what we know they are good at.

JIMMY MOYAHA: Moving the Tongaat business forward with a new vision in mind.

We’ll have to leave the conversation on that note. Co-founder and principal at the Vision Group Consortium, Rute Moyo, joined us to take a look at their plans for Tongaat Hulett.