Tongaat Hulett, which has a SA debt pile more than ten times its market value, is heading for business rescue after failing to get a nod from lenders on its restructuring plan.

The group needs R1.5bn as it services roughly R6.bn in SA debt and continues its sugar milling season.

Yesterday, it said lenders, after advancing R600m, now want this repaid.

‘The South African lender group has informed the company that in all of the circumstances of the restructuring plan, they are unable to support the restructuring plan, or provide the additional funding required,’ Tongaat said, according to a Fin24 report.

Tongaat's board approved a plan in October that includes disposing of its non-SA operations, securing investment for its SA business, introducing a five-year debt instrument that would be repaid through land disposals, as well as continuing to recoup money related to its accounting scandal.

The board has appointed Trevor Murgatroyd, Peter van den Steen and Gerhard Albertyn of Metis Strategic Advisers as the business rescue practitioners.

The firm's Botswana, Mozambique and Zimbabwe sugar operations are not financially distressed, the group said.

These three businesses are funded independently from the company and ‘should be largely unaffected by the adverse circumstances affecting the company,’ it said.

The firm is battling to recover from an accounting scandal, SA’s second biggest after Steinhoff, while also trying to whittle down what it previously said was a R7.6bn net debt pile.

Full Fin24 report