Sugar cane fields on a Tongaat Hulett farm in Shongweni

South Africa's Tongaat to restate prior results after accounting review

(Reuters) - South African sugar producer Tongaat Hulett Ltd said on Wednesday it would restate prior financial information after a formal review revealed certain accounting practices that needed to be re-examined.

The company said it had started implementing a turnaround plan and that the review included timing and recognition of land sales, as well as assessment of various assets for impairment.

Investors have been jittery about accounting irregularities after multinational retailer Steinhoff International Holdings NV revealed a more than $12 billion hole in its accounts in December 2017, which wiped out more than 90 percent of its market value.

Tongaat, which has operations in South Africa, Mozambique and Zimbabwe, said last month a review was being carried out by newly appointed CEO Gavin Hudson and it had revealed past accounting practices that may require remedial action.

The company said on Wednesday it was reviewing its strategic and financial position to stabilise its business and debt levels.

Tongaat, whose net debt stood at 7.754 billion rand ($539.54 million) as of Sept. 30, 2018, said in February it had entered into discussions with its lenders.

The company appointed PricewaterhouseCoopers (PwC) last month to review its accounting practices.

Tongaat's shares, which had fallen 23 percent since revealing the accounting issue last month, were down 3.6 percent at 22.64 rand.

The company's shares have been on a downward trajectory since it warned in February that it expected a full-year loss due to a sugar tax in South Africa and higher sugar imports.

"We continue to engage in a collaborative process with our debt providers to ensure the company's long-term sustainability," the company said on Wednesday.

(Reporting by Justin George Varghese in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)

First Published: 2019-04-24 14:47:08
Updated 2019-04-24 16:05:53

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