Tongaat deal goes sour

A legal challenge to debt-for-assets swap is on the cards.

- Roy Cokayne

Resolutions that would have resulted in a debt-for-equity swap at Tongaat Hulett and a significant dilution in value for shareholders in the financially distressed, suspended JSE-listed sugar and property developer failed to receive sufficient support to pass at a general meeting last Thursday.

A special resolution to enable the issue of additional Tongaat shares received 48% of votes in favour and 52% against, with 3.78% abstentions.

At least 75% of the votes cast were required to be in favour of the resolution for it to pass.