Star 2022-10-28

Lenders pull their support for the firm and deny additional funding THE MARKET was caught off-guard yesterday by the surprise announcement that troubled, debt-laden Tongaat Hulett – the sugar and property group, with a legacy of 130 years under its belt – had entered business rescue after its lenders gave the cold shoulder to additional funding. The board has appointed Trevor Murgatroyd, Peter van den Steen and Gerhard Albertyn of Metis Strategic Advisors as the business rescue practitioners of Tongaat. It said in a statement yesterday that its company’s debt levels at R6.6 billion remained well in excess of what could be serviced and that delays experienced in the recapitalisation had worsened the situation. “The South African lender group has informed the company that in all of the circumstances…

CONSUMERS could continue paying higher prices for food, beverages and tobacco products well into the festive season as the cost of manufacturing goods remains elevated, in spite of moderating producer inflation. Data from Statistics South Africa (StatsSA) yesterday showed that the annual headline producer price inflation eased less than expected as it edged lower in September. Stats SA said the producer price inflation (PPI) moderated to 16.3% in September year-on-year from 16.6% in August, falling for the second month in a row though the print was above market estimates of 15.7%. Prices slowed down for coke, petroleum, chemical, rubber and plastic products but remained elevated at 34.2% compared to the same month a year ago. The rate of increase in this category has slowed down, helped by the reduction in…

THOUSANDS of jobs hang in the balance and the future of the local sugar sector is uncertain after troubled Tongaat Hulett yesterday went into business rescue. Tongaat, the sugar and property group, is a major regional sugar producer with operations in Zimbabwe, Botswana, Mozambique and South Africa. With more than 26 000 employees, Tongaat also provides a livelihood to more than 20 000 cane growers. While Tongaat had whittled its debt down by more than R6.6 billion from a high of R11.7bn after an accounting scandal in 2019 brought the firm to its knees, the sugar producer said yesterday it remained unable to service its residual debt. Former Tongaat Hulett executives, including former chief executive Peter Staude, face fraud charges worth more than R3.5bn. Chris Logan, a…

ESKOM has put a dampener on the market rally by announcing various stages of power cuts into the weekend, reversing positive sentiment from the fiscally-prudent medium-term budget. The power utility ramped up load shedding to Stage 4 yesterday, decreasing to lower stages throughout the weekend following the near depletion of its emergency generation reserves. Eskom spokesperson Sikonathi Mantshantsha said Eskom was still facing generation capacity challenges, despite bringing some generation units back online. “The emergency generation re- serves are almost depleted, both the diesel and pumped storage dam levels. These, together with persistent high levels of breakdowns of generating units, are among the major contributors to the generation capacity shortages,” he said. This saw the rand weakening to R18.09 against the US dollar, slashing Wednesday’s rally as the greenback recovered…

POULTRY producer Astral Foods, which is expecting to lift earnings for the full year to end September, slumped 14% on the JSE yesterday as it warned of a potential earnings slump in the half-year to March 2023. Astral closed at R166.71 per share on the JSE yesterday, a 14.33% easing down on the previous day. It flagged possible impacts emanating from high feed costs and low pricing for the half year period to March 2023. “Extraordinary high feed input costs where this component makes up 70% of the cost of producing a live broiler. The group’s broiler operations are not able to fully recover record high feed input costs through the selling price of poultry,” the company said. Astral Foods was currently subsidising high input costs in the current selling…

ANGLO American Platinum (Amplats) yesterday said Eskom’s power outages knocked both concentrators and smelters in the third quarter, which led to a loss of production. In its PGM’s production report released yesterday, the miner said its own-managed mine’s PGMs production decreased by 3% to 587 200 ounces due to Eskom power outages and load shedding. “Amandelbult infrastructure closures and lower grade at Mogalakwena, partially offset by strong production performances from Unki up 41%, and Mototolo, up 9%, following the completion of the concentrator debottle-necking projects in 2021,” it said. Refined platinum group metals (PGMs) production, owned production, excluding tolling, decreased by 30% to 994 800 ounces due to the Polokwane smelter rebuild, its first full rebuild in 12 years, which was on track for completion towards the end…