Despite upbeat comments from management and backing from analysts, it turns out the sugar company is no sweet bet
JSE CEO Nicky Newton-King would do well to interrogate the roles of what she terms the guardians of governance in this value destructionIt’s far from the jaw-dropping disaster Steinhoff has been, but the apparent collapse of JSE-listed sugar producer Tongaat Hulett to a market capitalisation of a mere R4bn, from more than R12bn less than a year ago, hints at problems of a systemic nature.
But even as it sold off its property portfolio, Tongaat tried valiantly to reverse its shrinking sugar yields by pumping billions of rand into the industry — to be precise, R11bn between 2008 and 2018. The warning is starkly at odds with the comparatively upbeat comments from management at the release of the interims in November.
So, here’s the thing. On the one hand we have an elite group of individuals who have scored handsomely out of this tragedy, and on the other a large group of unwitting investors who’ve lost out. This cannot be put down to the “buyer-beware cut and thrust” of the markets.
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