Tongaat Hulett has welcomed the decision by independent third-party Rothschild & Co that a material adverse change (MAC) has not occurred with relation to the R5.35 billion sale of its starch business to Barloworld.
Tongaat CEO Gavin Hudson said was pleased that the decision by the independent expert had confirmed Tongaat’s belief that a MAC event had not occurred, and that the transaction would now go ahead.
“Throughout this process we have continued to work to close out workstreams to meet our other obligations under the agreement reached with Barloworld in February this year, so that we can conclude the sale and move forward. It is expected that we will be able to finalise this process by the end of October with the Starch business transferring to Barloworld from 1 November 2020.
“Starch is a great business and Barloworld is fortunate to be buying such a valuable asset with excellent people. However, the rationale for the sale remains unchanged – it will help us to continue meeting our debt reduction targets. Tongaat is a high potential business with a significant asset base, and this decision will ensure that our focus remains on bedding down the turnaround of our organisation,” he said.
Hudson said Tongaat would work with Barloworld in a collaborative manner to close the starch transaction as soon as possible now that the issue of the MAC dispute was behind the two companies.
“The sale of starch will position the group for longer-term sustainability as we deliver on our strategic business partnerships that will step-change our transformation initiatives, protect employee jobs and help support the economies of the countries in which we operate,” he said.