Tongaat may sell assets as it delays results again

print

Tongaat may sell assets as it delays results again

Published Date: 2019-10-08 | Source: Stephen Gunnion | Author: Stephen Gunnion

Tongaat may sell assets as it delays results again

The sugar producer and land owner says an internal review process has been complex and extensive, going back some six years.

Tongaat Hulett says it may sell some assets and is also contemplating a rights issue to help it reduce debt. And it won't be ready to release its 2019 financial results this month as previously expected.

In an update, the embattled sugar producer and land owner said it was making progress in its negotiations with its SA and Mozambican debt providers to restructure its short and long-term debt facilities. Measures to improve its liquidity had already been taken and a strategic review of the company had highlighted various alternatives to help it reduce debt.

A forensic review by PricewaterhouseCoopers Advisory Services had also been completed and an overview would be provided to shareholders when appropriate, it said. In the meantime, it was developing a remedial plan to strengthen corporate governance, financial controls and oversight throughout the group.

Tongaat's problems were brought to the fore after the group warned of a big loss for the year to end-March. Gavin Hudson, who took over as CEO in February, said a strategic and financial review had unearthed practices that required further examination and remedial action. It called in PwC to assist so that management could focus on the strategic review.

In June, it asked the JSE to halt trade in its shares due to mounting concern over the state of its financial accounts, saying that it would have to restate its 2018 results, which would hinder the release of its 2019 numbers. They should have been reported by the end of March but were delayed to October. It said the trading suspension was intended to protect investors.

Tongaat said the internal review process had been complex and extensive, going back some six years. It was performed in consultation with its external auditors and had necessitated a number of amendments to the Group's major accounting policies and practices. As a result, it said the release of its results would extend beyond the end of October. A further update would be provided to shareholders in mid-November, including the release date for its financials and the date for its annual general meeting.

Tongaat's shares were trading at R13.21 when they were suspended on 10 June, following a 76% decline since January.





Similar Stories