Hippo Valley, Triangle Move to Calm Markets After Tongaat SA Rescue Collapse

SAMUEL NJINGA

Hippo Valley Estates and Triangle Limited have moved to calm markets and safeguard investor confidence after the joint Business Rescue Practitioners (BRPs) of parent company Tongaat Hulett Limited applied to the High Court of South Africa to discontinue business rescue proceedings and place the group’s South African operations into provisional liquidation.

The application follows the collapse of the Business Rescue Plan after the lapse of key Sale Agreements with Vision Sugar, rendering the recovery framework unimplementable.

However, Hippo Valley Estates and Triangle Limited have emphatically distanced its local operations from the South African legal process, stressing that the developments do not affect Zimbabwean entities.

Dr Dahlia Garwe, Head of Corporate and Industry Affairs said developments in South Africa do not involve Zimbabwean entities, which operate as independent legal structures.

“The developments in South Africa do not involve our Zimbabwean operations, which function as independent legal entities with separate management, finances and operations.

Triangle Ltd and Hippo Valley Estates Ltd remain financially robust, operationally sound, and fully committed to all contractual obligations. Production continues normally, and we reaffirm our commitment to Zimbabwe’s agricultural sector and communities.”

The reassurance is significant for the Lowveld economy, where sugar production underpins thousands of livelihoods and contributes meaningfully to national export earnings.

Tongaat’s Zimbabwe footprint is anchored by Hippo Valley Estates Limited and Triangle Limited, both separately incorporated and listed on the Zimbabwe Stock Exchange.

Industry analysts say the corporate separation is critical to understanding the limited contagion risk.

“Legally and financially, the Zimbabwean operations are ring-fenced,” said a Harare-based corporate finance expert.

“While they share historical ownership links with the South African parent, they are governed under Zimbabwean law, with their own balance sheets, boards and funding arrangements.”

The distinction appears to have steadied nerves among outgrower farmers and suppliers who had feared operational disruptions following headlines about liquidation proceedings in South Africa.

Sugar remains one of the country’s most organised and vertically integrated agricultural value chains. The Lowveld estates operate two major sugar mills with a combined crushing capacity of approximately 3,5 million tonnes of cane annually, supporting thousands of estate workers and independent growers.

The sector also feeds into ethanol production, stockfeed manufacturing and downstream food and beverage industries, creating an ecosystem whose stability is central to the economy of Chiredzi and surrounding districts.

Any instability at milling level would have cascading effects across the region, where the estates provide not only employment, but also housing, health facilities, schools and social services.

For policymakers, maintaining stability in the sugar belt is strategically important, particularly as Zimbabwe prioritises agricultural value addition and export growth, with sugar ranking among the country’s consistent foreign currency earners.

The South African parent company entered business rescue in October 2022 after years of financial strain, accounting irregularities and mounting debt. Efforts to restructure through asset sales and refinancing arrangements under a Vision-backed plan ultimately failed when key funding conditions were not met.

Yet market observers note that Zimbabwe’s sugar operations have, in recent years, demonstrated operational resilience despite macroeconomic headwinds, including currency volatility and high input costs.

By affirming that production continues normally and contractual obligations are being honoured, Tongaat Hulett Zimbabwe is sending a strong signal to banks, growers, exporters and institutional investors that the local industry remains insulated.

“Continuity is everything in agriculture,” said Paul Zakariya, Secretary General of the Zimbabwe Farmers Union.

“If cane stops moving to mills, the losses compound quickly. The confirmation that milling continues uninterrupted is critical. There is need for managing this transition carefully so that there is no negative impact on the local producers who are already good at producing.”

While the immediate message is one of stability, analysts caution that stakeholders in Zimbabwe will continue closely monitoring developments in South Africa for any long-term structural implications.