1. SCHEME OF ARRANGEMENT
The Scheme of Arrangement between Starafricacorporation Limited ("the Company" or "Starafrica") and its members and creditors ("the Scheme Members"), which was sanctioned by the High Court on 7 August 2013 and registered with the Registrar of Companies on 14 August 2013, requires that updates be furnished to Scheme Members. Further to the updates published in the Herald on 27 September 2013 and 19 December 2013 Scheme Members are advised of progress on the Scheme as described below.
2. DISPOSAL OF ASSETS
The Scheme prescribes the disposal of Starafrica's investment in Tongaat Hulett Botswana ("THB") and Bluestar Logistics within six (6) months from 14 August 2013. Proceeds from the disposals are to be applied towards the payments to be made to creditors. Immediately following the sanctioning of the Scheme, the company received offers for both THB and BSL. Regrettably, although all efforts to finalise these initial offers were made, these fell through by 30 November 2013. Fresh efforts were then made to approach other prospective purchasers. We are pleased to report positive developments on the disposals as follows:
Blue Star Logistics
An offer to purchase Bluestar Logistics has been received from a prospective purchaser listed on the Zimbabwe Stock Exchange and negotiations are at an advanced stage. The proceeds of the disposal shall be deposited into a Trust Account to be managed by Dube, Manikai & Hwacha and used for partly settling creditors in terms of the Scheme of Arrangement.
Tongaat Hullet
An offer to purchase Starafrica's 33.3% shareholding in THB for BWP51.2 million has been received from a prospective purchaser listed on the Botswana Stock Exchange and accepted by the Company. The offer is subject to the exercise of pre-emptive rights by the other shareholders in THB and the conclusion of legally binding agreements with the prospective purchaser following the discharge of rights of pre-emption. A notice of intention to sell has been given to THB and a response is expected on or before 5 March 2014 as prescribed by the Shareholders Agreement. It is anticipated that the disposal will be completed and the proceeds of sale received by 30 April 2014.
3. PLANT UPGRADE
Significant progress has been made on the plant upgrade project at Goldstar Sugars Harare ("GSSH"). Ninety four percent (94%) of the equipment has been manufactured, of which 70% has been inspected by Societe Generale de Surveillance ("SGS"), a leading global inspection, verification, testing and certification services provider. SGS is currently inspecting the other 24% while the remaining 6% is under manufacture. The equipment will be shipped in 45 containers. To date, 17 containers have been shipped and are in transit or undergoing clearance at Durban Port. More shipments are due in early February 2014 with the last lot of containers being shipped on or before 28 February 2014. The equipment will be installed upon arrival at GSSH. It is anticipated that installation and commissioning will be completed by 30 April 2014. The General Manager of GSSH is in India to oversee the inspection, packing and shipment of the equipment with a view to expediting these processes. Civil works have been completed and the site is ready for assembly and installation of the new plant and equipment.
4. RAW SUGAR SUPPLY
The supply of raw sugar to GSSH was restored in December 2012 under an Over-arching Toll Refining and del Credere Agency Agreement signed between Starafrica and the raw sugar supplier. This resulted in GSSH resuming sugar refining operations in December 2012. Sugar refining operations were suspended recently to make way for the ongoing plant upgrade project. It is now projected that refining operations will resume in May 2014 when the new plant has been commissioned.
5. MARKET UPDATE
Although stiff competition continues to be faced from lower priced imported sugar, we welcome the measures that have been put in place by Government to support the local sugar industry through an improved import duty structure with a view to stabilizing the local sugar market. This will increase the uptake of sugar from the upgraded plant by industrial and direct consumption market segments. It is anticipated that the Company will start realising these benefits in the first half of the 2014/2015 financial year.
6. FEEDBACK
Documents in support of the above update can be inspected at the office of the Company Secretary. In addition to the inspection, Scheme Members may provide feedback to the Company Secretary on any issue relating to this update and the Scheme.
SACL Update on the Scheme of Arrangement Between Starafrica and Its Creditors
- SACL
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