TONGAAT: 1,321 0 (0.00%)
S.Africa's Tongaat Hulett, lenders to consider standstill agreement
JOHANNESBURG, May 16 (Reuters) - South Africa's Tongaat
Hulett Ltd said on Thursday it was looking to negotiate
a standstill agreement with its lenders, which had already
agreed to waive some of their rights related to their loans to
the troubled sugar producer.
The news supported Tongaat shares, which have been under
pressure since it issued a profit warning in February, and they
were up 1.7% by 1155 GMT.
The company, which has operations in South Africa,
Mozambique and Zimbabwe, has been battling to restore confidence
following the profit warning, due in part to high levels of debt
and interest costs hitting its performance.
Last month, it said it needed to restate prior results
because of an accounting issue, extending a 23 percent decline
in its shares since the problem was first identified in March.
Tongaat said it and its lenders intended to conclude the
standstill agreement, which would include a moratorium on debt
repayments excluding interest, in due course.
Tongaat's net debt stood at 7.754 billion rand ($547.7
million) as of Sept. 30, 2018.
"The lenders have expressed a willingness to conclude a
standstill agreement subject to terms and conditions to be
agreed, and necessary approvals being obtained," Tongaat said in
a statement to the stock exchange.
They had already entered into a waiver agreement, it
continued, which would see them forgo their rights arising from
breaches of loan covenants in return for the company taking a
number of actions.
These included providing a variety of collateral to lenders
against the borrowing, including mortgages on properties owned
by Tongaat and the rights to its debtors and inventory, updating
them with information on an ongoing basis and limiting financial
support to non-South African companies within the group.
($1 = 14.1581 rand)
(Reporting by Onke Ngcuka
Editing by Emma Rumney/Keith Weir)
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