TONGAAT HULETT LIMITED – OUTCOME OF AN INVESTIGATION BY THE TAKEOVER REGULATION PANEL (“THE TRP”)

6 June 2022

Following its investigation, the Takeover Regulation Panel (TRP) has issued a ruling withdrawing its previous determination in which it exempted Magister from the potential future obligation to make a mandatory offer to Tongaat shareholders as a consequence of it partially underwriting Tongaat Hulett’s proposed rights offer. The TRP investigation focused on whether a third-party who bought shares in Tongaat Hulett subsequent to the announcement of the rights offer is related to, and therefore deemed to be a concert party of, Magister. 

Tongaat was not a party to the share acquisition, nor were adverse findings made against Tongaat in the TRP ruling.

The operations of the company remain uninterrupted.

Each of Tongaat and Magister is entitled to appeal the ruling.

Tongaat is considering the ruling and will thereafter decide on its course of action and will make a further announcement in due course. 

An exemption from the potential future obligation to make a mandatory offer to Tongaat shareholders is a condition precedent to the Magister transaction. The ruling does not trigger an obligation on Magister to make a mandatory offer to Tongaat shareholders.

Tongaat remains committed to a recapitalisation. As noted in the announcement released on 31 May 2022, Tongaat is continuing to proactively engage with stakeholders regarding a capital raise transaction, and a sustainable funding solution for the Tongaat group.

There is positive commitment from various stakeholders who recognise the critical social impact THL has in South Africa and across the SADC region.

Tongaat remains firmly of the view that a capital raise is a better alternative to strategic asset disposals, particularly an accelerated disposal programme which is unlikely to realise full value for the assets.