Hippo Valley Estates says the planned liquidation of Tongaat Hulett in South Africa will not affect operations in Zimbabwe, but the future of the holding company will be keenly watched given strong interest in control of the country’s biggest sugar producer.
Tongaat Hulett wholly owns Triangle and holds 50.3% of Hippo Valley Estates. Together, the two operations produce over 50% of Zimbabwe’s sugar output.
Tongaat Hulett entered business rescue in October 2022 after a corporate scandal left it in a R12 billion hole. On Thursday, the Business Rescue Practitioners said they would file for liquidation after exhausting options to save the group.
Hippo Valley has moved to calm concerns, saying: “The developments in South Africa do not involve our Zimbabwe operations, which function as independent legal entities with separate management, finances, and operations. Triangle Ltd and Hippo Valley Estates remain financially robust, operationally sound, and fully committed to all contractual obligations.”
In 2024, a rescue plan was crafted for Tongaat to sell its assets to the Vision Group, a consortium that includes South African businessman Robert Gumede and Zimbabwean investor Rutenhuro Moyo’s Remoggo.
The deal would see Tongaat selling 100% of its shares and shareholder loan claims to a Vision Group-controlled Mauritian nominee, Vision Sugar Holdings. That would hand the consortium effective control of Triangle Sugar Corporation, and with it, the 50.3% stake in Hippo Valley Estates.
The original plan hinged on a debt-to-equity swap, failing which, an asset sale. After the Vision Group bought Tongaat’s banks’ debt, it became the main secured lender. When the consortium failed to refinance funding from the Industrial Development Corporation, it refused to extend deadlines any further. That left the business rescue practitioners with little option but to push the company into liquidation. Attention shifts to who might emerge with control of Tongaat, and ultimately the Zimbabwe estates. However, because it now holds R8bn in secured claims, the Vision Group have a strong say on what happens to Tongaat’s assets.
There has been no shortage of suitors. In 2022, Tongaat shareholders rejected a rescue offer from Zimbabwean businessman Hamish Rudland, who had proposed underwriting a R4 billion rights issue through his company, Magister.
In 2024, the Zimbabwe government opposed a proposed sale of the Zimbabwe assets to Tanzania’s Karega. Instead, authorities bid for the estates through the Sovereign Wealth Fund, now known as Mutapa.
At the time, Treasury Secretary George Guvamatanga wrote to Tongaat saying government’s ties to the estates were “more than just commercial” and that their operations had “created a bond with Zimbabwean farmers that goes beyond merely working the fields.”
Selling to Mutapa made sense, he argued, because the fund “has the ability to acquire all of the necessary approvals, especially the water and land rights, and it can continue the work started with Tongaat in the community.”
In 2021, Tongaat’s Zimbabwe sugar milling licence was extended by a further 20 years to December 2040. The company and government are also in delicate and long-drawn-out talks over 99-year leases for some of its estates. Government and Tongaat are also partnering local banks on Project Kilimanjaro, a plan to open up 4,000 hectares of virgin land for production by small-scale farmers, a key constituency.
