20,000 Zimbabwean workers face uncertainty as Tongaat Hulett files for liquidation

HARARE – Approximately 20,000 Zimbabwean workers face an uncertain future after Tongaat Hulett Limited Zimbabwe, one of the country’s largest private-sector employers, filed for provisional liquidation following the collapse of its business rescue plan.

In a notice issued on 12 February 2026, the South African-incorporated sugar producer informed shareholders and affected persons that its Business Rescue Practitioners (BRPs) had concluded there was no longer a reasonable prospect of rescuing the company.

The decision follows the lapse of key sale agreements underpinning the approved business rescue plan.

Tongaat Hulett was placed under business rescue on 27 October 2022. A business rescue plan proposed by Vision was approved by the required majority of creditors on 11 January 2024.

The plan envisaged Vision acquiring the historic lender group’s claims and implementing either a debt-to-equity conversion or, failing that, a series of asset sale transactions.

After shareholders did not support the debt-to-equity conversion, the plan shifted to the implementation of sale agreements under which Vision would acquire the company’s operating assets and certain regional investments, while assuming responsibility for stabilising and funding the business.

However, the implementation of the plan was subject to several non-negotiable conditions.

These included the refinancing of a R2.3 billion post-commencement funding facility from the Industrial Development Corporation, the funding of a R517 million escrow account linked to the South African Sugar Association pending legal proceedings, and the provision of R75 million for distribution to concurrent creditors.

The BRPs said the sale agreements have now lapsed after Vision declined to grant an extension, rendering the business rescue plan incapable of implementation.

In terms of section 141(2)(a) of South Africa’s Companies Act, the BRPs filed an application in court on 12 February 2026 for the provisional liquidation of the company.

“In accordance with section 141(2)(a) of the Companies Act, the BRPs have therefore concluded that there is no longer a reasonable prospect of rescuing the Company. Consequently, on 12 February 2026, the BRPs filed an application in court for the provisional liquidation of the Company,” the company stated.

The development places thousands of employees, along with growers, suppliers, customers and creditors, in a state of uncertainty.

The BRPs and management acknowledged the impact of the move, expressing appreciation for the resilience shown by stakeholders during the prolonged restructuring process.

“The BRPs and management acknowledge the uncertainty that this development creates for employees, growers, suppliers, customers, creditors and affected communities, and express appreciation for the resilience and support demonstrated during this challenging period,” the company noted.

The implications are particularly significant in Zimbabwe, where Tongaat Hulett is one of the country’s largest private sector employers.

In 2025, Tongaat Hulett Zimbabwe laid off 1,000 workers as part of cost-cutting measures aimed at surviving persistent currency instability and inflationary pressures.

The company has constantly cited soaring labour and fertiliser costs, as well as currency losses linked to Zimbabwe’s previous volatile exchange rate, as major challenges.

Tongaat operates two sugar mills in Zimbabwe with a combined crushing capacity of 3.5 million tonnes of sugar cane annually.

Zimbabwean businesses have endured prolonged economic instability marked by currency depreciation and episodes of hyperinflation, placing additional strain on major employers such as Tongaat.