The Tongaat Hulett company, which operates the sugar mills of Mafambisse, in Sofala, and Xinavane, Maputo, has just announced a proposal for recapitalization, through a rights offering of new shares, partially underwritten by Magister Investments Limited, a shareholder and partner of the group.

This is a financial injection that will be made into all production facilities operating throughout southern Africa.

"Proceeds from the offering will be used to sustainably reposition the group and help secure the future of its approximately 29,000 (at peak harvest season) workers in operations in South Africa, Mozambique, Zimbabwe and Botswana," reads a company statement.

According to the company, a successful rights offering will further reduce the debt significantly that the group has in the market, allowing management to focus on repositioning the company for long-term growth.

However, the amount of equity to be raised and the price of the rights offering is yet to be determined, but is expected to enable the company to reduce debt to sustainable levels.