Tongaat Hulett’s share price plunged as much as 21% on Tuesday, its worst level since 1993, as speculation continues in the market as to how the sugar producer will deal with its liquidity crisis.
It is expected to meet with lenders this week, having said that due to its high debt levels and interest costs, “any reduction in operating profit has a larger impact on earnings”. Regardless of how Tongaat plans to recapitalise its business, it is going to be bad news for shareholders, said Treurnicht.
In Mozambique, Tongaat said high levels of imports have prompted the group to export sugar from the country at lower prices, adding that cane valuations in both SA and Mozambique haev been lowered.
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