Sefalana, Star Africa deal collapses

Published: 03 April 2014

BOTSWANA Stock Exchange listed Sefalana Holdings bid to buy starafrica corporation's 33 percent stake in Tongaat Hullet Botswana collapsed after the parties failed to agree on price, sources close to developments said.

"While a positive outcome had become most certain, Sefalana developed cold feet in the last minute and it was largely due to disagreements over the price," said the source.

In a note to shareholders recently, starafrica said an offer had been received from the Botswana Stock Exchange listed company interested in its Tongaat shareholding.

It said the company had offered to buy starafrica's 33,3 percent shareholding in Tongaat Hulett Botswana valued at BWP 51,2 million (about $5,8 million) and "the transactions will be completed and the proceeds from sale received by 30 April 2014."

While no official comment could be obtained from Sefalana by the time of going to print, it last week issued a cautionary statement advising shareholders that negotiations with "a third party" in the region had collapsed.

"The company previously reported that it had entered into negotiations with another third party in the region," said Sefalana on March 26.

"Discussions with this third party have now been concluded and shareholders are hereby informed that the company will no longer be pursuing this transaction."

No comment could be obtained from starafrica.

Sefalana is a holding company with interests in retail, manufacturing, property and vehicle sales. It operates Sefalana Cash and Carry, Sefalana Hyper and the Shoppers brand.

starafrica resolved to sell some of its assets to settle part of its $49,2 million debt and the sale of the Tongaat Hulett Botswana was expected to lower the company's debt. An offer has also been received for its transport and logistics company Bluestar Logistics.

Starafrica Corporation has disposed of other non-core businesses, namely Polyfim Plastics, Highfield Bag, retail outlets in Gwanda and Hwange, Arthur Garden Engineering and Grant Chemicals which have been hampering the company's financial performance. Management has shifted its focus to the core business of sugar refining.

The company reported that substantial progress had been made on the plant upgrade at Goldstar Sugars Harare with commissioning of the plant scheduled for April 30 this year.

Sugar refining operations remain suspended due to the ongoing plant upgrade project and will restart in May after the commissioning of the new plant.
- The herald