The Tongaat Hulett Refinery in South Coast Road in eThekwini. Photo: SUPPLIED.
Tongaat Hulett (THL), the sugar and property group in financial distress, said yesterday it wished to retain its listing post the rescue plan by Vision Consortium, but it might get delisted after a proposed equity subscription because a potential mandatory offer might result from it.
In January creditors approved Vision’s plans to save THL. Led by businessman Robert Gumede, Vision includes investors from Zimbabwe and Pakistan, and it plans to take over THL after buying its approximate R8 billion debt through a debt-for-equity swop arrangement.
In terms of the business rescue plan for THL, Vision will acquire THL’s claims from its lenders, and the subsequent use of a portion of such claims by Vision to subscribe for new ordinary shares in THL.
This would result in the continued trading of THL, the recapitalisation of its balance sheet, and the possible continued listing of THL on the JSE, even though current shareholders would become minority shareholders, while Vision would hold the bulk of the listed shares.
The equity subscription by Vision will result in it owning 97.3% of the issued share capital of Tongaat.
The value of the portion of the lender group claims extinguished by means of a merger for Vision Investments’ subscription for shares in THL (equity claim) is determined as the total lender group claims on the date of subscription, less R3.6bn.
The equity claim amount of the share subscription was R4.89bn.
The equity claim would be extinguished by means of a merger against the issue of 4.86 million shares, which represent the maximum number of shares available for issue based on the current number of authorised, but unissued shares of THL, the group said in a JSE regulatory notice yesterday.
A deemed share price of 101 cents a share could be calculated based on the value of the equity claim. However, this price had not been arrived at through any determination of fair value given the financial distress of the company.
THL thus did not believe the 101 cents to be representative of the fair value per share; and if a mandatory offer were to be triggered, the mandatory offer price would be determined based on the fair value per share and not on the deemed share price of 101 cents per share.
The 30-day weighted average trading price of THL shares was not available, as it has been suspended from trading on the JSE as of July 2022. Its share price at suspension was R4.04.
BUSINESS REPORT