South Africa: Troubled Tongaat Says Secures IDC Funding to Complete Season and Prepare for Next Year

Troubled sugar producer Tongaat Hulett, which entered business rescue in October, has acquired "post commencement finance" from the Industrial Development Corporation of South Africa (IDC). This will enable it to finish out the current season with seed capital to prepare for the next while the business rescue proceedings unfold.

Tongaat made the announcement on Wednesday in a "business rescue update" on SENS. It remains to be seen if the business can indeed be rescued, but at least it now has a lifeline.

"The Company is pleased to inform shareholders that it has secured post commencement finance from the IDC," Tongaat said, without disclosing the amount.

"Post commencement finance" or PCF "is finance or credit granted to a company in Business Rescue and is regulated by section 135 of the Companies Act," according to the Business Rescue Exchange. ( URL: https://www.brexchange.co.za/post-commencement-finance-2/). to make Post Commencement Finance more attractive to investors and financiers."

"Post Commencement Finance may be applied towards the payment of the Practitioner's remuneration, employee costs, working capital or any other avenue that may maximise the probability of successfully rescuing the company."

This effectively means that it provides liquidity when the taps have run dry.

Tongaat said the finance secured...

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