The business rescue practitioners say they have a duty to forge ahead with the rescue plan adopted by creditors, even though shareholders -- who stand to lose almost everything -- have yet to vote on it. An agricultural economist says they have an option and should exercise their rights.

Listen to this article 6 min Listen to this article 6 min Tongaat Hulett's business rescue practitioners (BRPs) have played down an alternative proposal for the sugar producer, saying they have a legal obligation to forge ahead with the rescue plan adopted by creditors.

In a Sens announcement on Friday, Metis Strategic Advisors, the BRPs, addressed an opinion article by agricultural economist Kobus Laubscher, published in Business Day and on Moneyweb, who argued that a proposed R8-billion capital injection for Tongaat would give shareholders a much better deal than the Vision Consortium rescue plan adopted by creditors on 12 January.

Tongaat's shareholders will meet on 8 August to vote on Vision's plan. On 3 July, in a joint circular, Vision and the BRPs warned that if the plan was not adopted, they would have no option but to switch to "plan B" and forge ahead nevertheless.

Should the exchange of debt for equity not be approved by shareholders, the approved business rescue plan for Tongaat provides for an alternative mechanism to transfer ownership of Tongaat's assets and businesses to Vision.

"In the alternative mechanism, a shareholder vote will not be required. [After] transfer of ownership of the Tongaat...