Star Africa scales down operations

Published: 30 September 2013

ZSE-listed conglomerate, Starafrica Corporation has said that it plans to dispose of two of its investments by the end of November this year as it seeks to pay-off creditors.

Shareholders approved the disposal of the company's investment in Tongaat Hulett Botswana and Bluestar Logistics at an EGM held in July this year.

In an update to scheme members, Starafrica Corporation company secretary, Aldo Musemburi said: "Proceeds from the two disposals will be applied towards the payments to be made to creditors and lenders on or before 7 February 2014 in accordance with the terms of the scheme."

He said negotiations with prospective purchasers were in progress and the company hopes to conclude both disposal transactions by November 30 this year.

The development comes after a scheme of arrangement meeting between Starafrica Corporation and its lenders and creditors was overwhelmingly voted for at a creditors' meeting held earlier in June this year.

The scheme was sanctioned by the High Court and registered with the Registrar of Companies last month.

It also provides for a grace period of six months and expires on February 6 2014.

A scheme of arrangement is a court-approved settlement between a company and its shareholders or creditors and is used to execute arbitrary changes in the structure of a business.

Last year, the group disposed of Red Star Holdings, Arthur Garden Engineering, West Bev Limited and Marathon Tyres, including designated entities under Silver Star Properties.

The Borrowdale Road head office was also sold to National Social Security Authority (NSSA).

Musemburi said the plant upgrade project at Gold Sugars Harare (GSSH) was progressing according to schedule.

"Eight-five percent of the contract price has been paid as per the payment terms stipulated in the contract. The first lot of equipment constituting 35% of the total is undergoing pre-shipment inspection by international engineering consultancy firm SGS," said Musemburi.

- thestandard

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