Tongaat sells starch business for R5bn

JOHANNESBURG – BELEAGUERED sugar producer Tongaat Hulett is offloading its 100-year-old starch business to a subsidiary of logistics company Barloworld for R5.35billion in an effort to reduce its debt and cover on-going operations.

This comes as the group last year dodged a bullet after trading in its shares was suspended at the height of accounting irregularities, resulting in inflated asset and profit values.

Trading in its shares was lifted in February with the restatement of the group’s September 2018 results.

Tongaat on Friday afternoon issued a notice to shareholders indicating that the starch business would be sold to KLL Group, a wholly owned subsidiary of Barloworld.

Its starch business, established in 1919, is one of the largest wet millers in sub-Saharan Africa and operates four plants located at Germiston, Kliprivier and Meyerton in Johannesburg, and Bellville, producing modified and unmodified starch, as well as a powdered glucose and agri-products. The mills have a capacity to process more than 850000 tons of maize a year.