Tanzanian multimillionaire Seif Ali Seif to acquire South Africa’s Tongaat Hulett
Kagera Sugar, a company ultimately owned by Tanzanian multimillionaire Seif Ali Seif, will acquire the sugar assets of Tongaat Hulett, a South African sugar producer and property group.
Tongaat Hulett, which is suspended from the Johannesburg Securities Exchange (JSE) and under business rescue since October 2022, confirmed the proposed transaction on Friday. It will involve the acquisition of its complete sugar division in South Africa and its sugar businesses in Zimbabwe, Mozambique, and Botswana.
Tongaat did not disclose the monetary value of the equity deal, nor did it say whether the group would stay on the JSE (based on the bourse lifting the suspension of trade in the company’s shares).
Tongaat’s business rescue practitioners sought strategic partners to rescue the company. Out of eight candidates, Kagera, a sugar manufacturing company located in the North-Western part of Tanzania, emerged as the preferred partner.
The BRPs praised the financial strength and solid track record of the Kagera group regarding the deal.
Tongaat Hulett’s shares are currently suspended from trading on the JSE due to the company’s delayed publication of its financials.
The company has faced significant challenges due to high and increasing debt levels, alleged financial misstatements, and historical mismanagement under past leadership.
In October 2022, the company voluntarily entered a business rescue process for two of its South African operations, Tongaat Hulett Limited and Tongaat Hulett Development Proprietary Limited, after lenders withdrew their financial support. The company cited excessive debt levels following prolonged business recapitalization plans.
Kagera Sugar Limited is a sugar manufacturing company situated in Bukoba, in North-western Tanzania.
The company is the third largest sugar producer in the country and is involved in growing sugar cane, processing and distribution of sugar. It is a subsidiary of Super Group, a large Tanzanian conglomerate controlled by Ali Seif and his family. Super Group’s interests span automobile manufacturing, logistics, steel manufacturing, and sugar production.