SOUTH AFRICA-Gavin Hudson has resigned as CEO of Southern Africa’s biggest sugar group Tongaat Hulett effective February 28 adding another blow to the company’s business rescue plan.
His resignation follows the second postponement of the publication of the sugar company’s business rescue plan by a month according to the group’s business rescue practitioners (BRPs).
Tongaat Hulett has been in existence for more than 130-year-old. The company’s shares crashed in the wake of the SA’s second-biggest accounting scandal after Steinhoff.
Before that, the company is reported to have been battling with a crippling debt pile threatening the group’s survival.
Hudson, a former SABMiller executive, was appointed on 1 February 2019 to spearhead a turnaround of the group, a mandate which included a comprehensive review of its finances.
According to the company, Hudson was also to strategize on reducing the debt burden by R6.5 billion (US$381M) and turning around governance and operational processes.
Unfortunately, these turnaround efforts were hampered by Covid-19, civil unrest, and floods in KwaZulu-Natal and the company started business rescue proceedings in October 2022.
An anticipated business rescue plan has however not been forthcoming with executives seeking extensions to their deadline.
The firm’s BRPs said in a statement that the recent postponement came amid efforts to secure post-commencement financing for the company, meeting with affected groups, as well as investigating the affairs of the company, “which are very complex”.
The business rescue plan report was supposed to be published within 25 days of commencing rescue operations as per the Companies Act.
However, in mid-November, the delivery date was postponed to January 31 with the approval of most of the creditors.
Further, on the eve of the supposed report, the BRPs said that creditors had voted in favor of an extension of the date to publish the business rescue plan to February 28, 2023.
As the company struggles to remain afloat, charges have been laid against some of the former executives, and proceedings are expected to resume in 2023, with a pre-trial conference scheduled for 17 February.
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