Tongaat Hulett has entered into a R375 million sale agreement for its Eswatini agribusiness as part of its strategy to reduce debt, it said on Wednesday.

The sugar producer is selling its Tambankulu agribusiness to the Eswatini Public Service Pensions Fund.

Tambankulu comprises two agricultural estates on the Black Umbuluzi River in northeastern Eswatini, formerly known as Swaziland. The estates include 3 767 hectares of fully irrigated land under sugarcane, and produce 62 000 tons of sucrose annually. Tambankulu is the largest independent sugarcane estate in Eswatini, said Tongaat, with an average annual yield per hectare of 125 tons. It delivers sugarcane to the Simunye and Mhlume mills.

The debt-laden sugar producer said the sale is part of its undertaking to funders to reduce its debt by R8.1 billion by March 2021. The Durban-based business is currently locked in an impasse over the sale of its starch business to a company owned by Barloworld, as it tries to bring its debt position under control and stabilise its finances.

Part of its debt restructuring plan includes potential sales of noncore and core asset, as well as equity capital raising initiatives.

Tongaat said on Wednesday that although Tambankulu was a "quality and well run business" it was not fully integrated into the group's larger sugar business. The transaction is expected to be concluded on December 1.

Tongaat's share price was up 1.9% in morning trade at R5.45.