18 January 2022

Tongaat Hulett announced today that the proposed major recapitalisation via a rights offer, was overwhelmingly supported by shareholders at a special general meeting held earlier.

Tongaat Hulett CEO Gavin Hudson said: “We are very happy with today’s outcome and appreciate the robust shareholder engagement process and their firm support. This is a key step in securing the future of Tongaat and provides us with the mandate to further engage with shareholders to raise fresh capital to reduce our unsustainable debt levels. We look forward to this contributing to a market capitalisation consistent with the company’s value as a leading regional agriculture business, helping to protect the jobs of our 29 000 employees across SADC, and ensuring that Tongaat can continue to be a major socio-economic contributor to the region.”

Update on timing

The rights offer can only proceed once all lender and regulatory approvals are obtained and other conditions precedent are fulfilled, all of which are in progress and are expected by the end of March 2022.

The discount at which the company’s shares will be offered will be determined by the Board having regard to market conditions and investor demand. The Board is aware of concerns regarding the level of the discount that may arise and will act in in the best interests of shareholders and other stakeholders, taking into account the need for fresh capital. There are numerous precedents in the South African market regarding typical discount levels, and the Board will consider comparable recent transactions when making a determination. The discount will be no less than 15% to the 30-day volume-weighted average price of the company’s share at the time the rights offer price is announced.