Renewal of cautionary and further update on Group processes
Tongaat Hulett Limited
(Registration number 1892/000610/06)
Share code: TON
(“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
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
- 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
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
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
7 October 2019
Bowman Gilfillan Inc.
Investec Bank Limited
Date: 07/10/2019 05:19:00
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