Home » Zimbabwe’s wealthy Rudland family moves to take over Tongaat Hulett sugar producer

Zimbabwe’s wealthy Rudland family moves to take over Tongaat Hulett sugar producer

by Omokolade Ajayi
Zimbabwe

One of Zimbabwe’s wealthiest families, the Rudlands, has moved to acquire a majority stake in the leading Southern African sugar producer, Tongaat Hulett, through a proposed major recapitalization and rights offer of new shares.

The move comes after an entity related to the Rudlands, Magister Investments Limited, entered into an agreement with Tongaat Hulett to partially underwrite a rights offer, subject to the receipt of shareholder approval and a green-light from the regulatory authorities.

Although the amount of equity capital to be raised and the pricing of the rights offer have yet to be determined, a statement issued on the Johannesburg Stock Exchange revealed that the recapitalization efforts will help reduce Tongaat Hulett’s debt portfolio to sustainable levels.

The deal will see Magister, a Mauritius-based investment holding controlled by Zimbabwean businessman Hamish Rudland, underwrite up to R2 billion ($127 million) in capital through a rights offer as a shareholder and strategic partner in the deal.

Meanwhile, the Rudland-led holding will take on a stake of no more than 60 percent in Tongaat Hulett upon the completion of the $127-million equity capital raise.

Magister presently owns a 0.15-percent stake in the sugar producer.

Tongaat Hulett CEO Gavin Hudson said the proceeds from the rights offer will be used to reposition the group’s operations to secure the future of its 29,000 (at peak harvest season) employees across South Africa, Zimbabwe, Mozambique and Botswana.

He added that the management has implemented a turnaround strategy in the past 2.5 years to help facilitate future growth by improving governance and operational efficiency, reducing debt and driving cash flow. 

Tongaat Hulett produces approximately 43 percent of South Africa’s sugar.

Shares in the group closed at a price of R6.94 ($0.44377) on the local bourse yesterday, Nov. 18, 5.96-percent lower than its opening price of R7.45 ($0.47638) for the day.

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