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TONGAAT HULETT LIMITED - Renewal of cautionary and further update on Group processes

Release Date: 07/10/2019 17:19
Code(s): TON     PDF:  
 
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Renewal of cautionary and further update on Group processes

Tongaat Hulett Limited
(Registration number 1892/000610/06)
Share code: TON
ISIN ZAE000096541
(“Tongaat Hulett” or “the Group”)

RENEWAL OF CAUTIONARY AND FURTHER UPDATE ON GROUP PROCESSES


Renewal of cautionary

Shareholders are referred to the cautionary announcement of
8 March 2019 and the subsequent renewals thereof, the most
recent of which was released on 27 August 2019. The cautionary
announcements are still relevant and applicable. Accordingly,
shareholders are advised to continue to exercise caution.


Further update on group processes
The reconstituted board of directors (“the Board”) wishes to
provide shareholders with the following update:


- Turnaround plan
  In February 2019, the Board provided the new Chief Executive
  Officer, Mr. Gavin Hudson, with the mandate to conduct an
  immediate and comprehensive strategic and financial review of
  the Group with the aim of achieving stability and
  sustainability.

  Substantial time and effort have gone into the review which
  has resulted in a wide-ranging turnaround plan affecting most
  parts of the business. Despite the significant challenges the
  Group faces, good progress is being made in the implementation
  of this plan, including broad-based economic empowerment
  initiatives.


- Debt restructuring

  Tongaat Hulett is progressing well in its negotiations with
  its South African and Mozambican debt providers on the
  restructure of its short and long-term debt facilities and is
  looking to conclude agreements as soon as reasonably possible.
  Initiatives and interventions to improve liquidity have
  already been implemented, and the Board continues to closely
  and regularly monitor liquidity and solvency.

  The strategic review has highlighted various alternatives
  available to Tongaat Hulett to reduce the Group’s debt.
  Consequently, the Board with the assistance of its advisors,
  is considering the possible sale of assets, a possible equity
  capital raise or a combination thereof.


- Forensic review
  In March 2019, PricewaterhouseCoopers Advisory Services
  Proprietary Limited (“PwC”) was appointed by Bowman Gilfillan
  Inc. (“Bowmans”) on behalf of Tongaat Hulett, to conduct a
  forensic review. The forensic review is now complete, and the
  final report has been issued to Bowmans.

  An overview of the report will be provided to shareholders at
  an appropriate time. The report itself is confidential and
  subject to legal privilege, and accordingly will not be
  published.

  The Board, together with the management team, is progressing
  well in developing a robust remedial plan in response to the
  forensic report, which is directed at strengthening corporate
  governance, financial controls and oversight at all levels
  within the organisation.


- Financial results
  With the completion of the forensic review, the Group wishes
  to advise shareholders that the process of completing the
  consolidated financial statements for the year ended
  31 March 2019 (“March 2019 Financial Statements”) is well
  progressed.

  In addition to the forensic review, management has completed
  its comprehensive internal review process. The internal
  review spans all the Group’s business units and covers the
  appropriateness of the selected accounting policies, the
  application thereof and an assessment of the key assumptions
  used to prepare the financial statements.

  The internal review process has been complex and extensive,
  going back some six years. It was performed in consultation
  with the Group’s external auditors and has necessitated a
  number of amendments to the Group’s major accounting policies
  and practices. In exercising an appropriate level of
  governance and oversight, the Group’s Audit Committee has
  approved these revised accounting policies as being in
  accordance with International Financial Reporting Standards
  and in line with industry practices.

  As a result, the release of the audited March 2019 Financial
  Statements will extend beyond the previously anticipated date
  of 31 October 2019.

  The Board will issue a further update to shareholders on or
  about 18 November 2019 which will include the release date
  for the March 2019 Financial Statements and the date of the
  annual general meeting for the year ended 31 March 2019.


Message from the Chairman
“The   Board,together  with management,continues to
relentlessly drive the Turnaround Plan with the preservation of
shareholder value being the key priority. The process to
identify the restatements has been thorough, with the right
level of governance, as we are cognisant of the need to provide
stakeholders with reliable financial information. We will update
the market on the release date for the March 2019 financial
statements as soon as practically possible.” Louis Von Zeuner



Tongaat
7 October 2019

Legal advisors
Bowman Gilfillan Inc.

Sponsor
Investec Bank Limited

Date: 07/10/2019 05:19:00
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