ESWATINI COMPCO APPROVES TAMBANKULU ESTATES SALE

MBABANE - The Eswatini Competition Commission (CompCo) has approved the sale of Tambankulu Estates to the Public Service Pension Fund (PSPF).

Back in  June this year,  it was announced that Tongaat Hulett entered into an agreement with PSPF to sell Tambankulu Estates, its Eswatini agri-business for E375 million. It is one of the duties of the Competition Commission to approve acquisitions and mergers.

Following the June move, yesterday Tongaat Hulett issued an announcement regarding the fulfilment of the suspensive conditions relating to the disposal of the shares.

Legally a suspensive condition can be described as a condition which suspends the operation or effect of one, or some, or all, of the obligations under a contract until the condition is fulfilled. 

“Shareholders of Tongaat Hulett (THL) are referred to the terms announcement dated 17 June 2020 and the subsequent related announcements wherein Shareholders were advised that THL and its wholly owned subsidiary, Format Development Corporation Limited would dispose of their shares and shareholder claims in Tambankulu Estates Proprietary Limited to the Eswatini Public Service Pension Fund.

“THL shareholders are now advised that the approval of the Eswatini Competition Commission in terms of the Eswatini Competition Act No.8 of 2007 has been received. All the suspensive conditions to which the Transaction was subject have now been fulfilled or waived and the Transaction has become unconditional,” reads the statement from Tongaat Hulett.

transaction

The closing date of the transaction will be December 1, 2020.

Meanwhile, back in June, Tongaat Hulett CEO Gavin Hudson had said the sale of Tambankulu was fully aligned with the company’s turnaround plan, and would allow Tongaat to pay down further debt.

“Our number one priority is to ensure the long-term sustainability of Tongaat, and a key element of this is paying down our debt as quickly as possible. Tambankulu is a quality, well-run business that is not core to our larger sugar business. This was a reasonable offer based on a thorough due diligence and independent valuation input that supported the price, and after due consideration the Board decided it would be in the best interests of the company and its shareholders to dispose of this asset”, he said. 

“PSPF is also considered a strong strategic shareholder of this business going forward, which was a key consideration for the board.” said Hudson.

Tambankulu is the largest independent sugarcane estate in Eswatini, located on two agricultural estates near the Black Umbuluzi River. The estate has more than 3 700 hectares of land under sugarcane, and is producing 62 000 tonnes of sucrose a year. Tambankulu’s farms are modern, using high tech irrigation systems, fertigation, artificial ripeners and herbicides. 

The estate delivers its sugarcane to the nearby Simunye and Mhlume sugar mills. 

Responding to an earlier questionnaire, PSPF Corporate Services Manager Elkan Makhanya said the sale was initiated in 2019 and his office was approached by the seller.

“Our plan is to diversify and invest in non traditional investment assets.

“We are confident that this is a good investment. We anticipate good investment returns from this transaction,” he had said.

Post your comment

Your name:

Your e-mail address:

Add your comments:

Please enter the code you see in the image:

Image:

Code: