7/27/2019 SACL Update on the Scheme of Arrangement Between
Starafrica and Its Creditors
1/1
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, 19 December 2013 and 23 January 2014, Scheme Members are
advised of progress on the Scheme as described below.
2. DISPOSAL OF ASSETS The Scheme prescribes the disposal of
Starafricas investment in Tongaat Hulett Botswana (THB) and
Bluestar Logistics (BSL) 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, these initial
offers
fell through by 30 November 2013 mainly because the potential
buyers failed to raise the funds thereof. Fresh efforts were then
made to
approach other prospective purchasers, as follows:
Blue Star Logistics
Negotiations with a prospective purchaser listed on the Zimbabwe
Stock Exchange are nearing conclusion. Proceeds of the disposal
remaining after settlement of the vehicle nance loan and
transaction costs shall be deposited into a Trust Account to be
managed by our
attorneys, Dube, Manikai & Hwacha and used for partly
settling creditors in terms of the Scheme of Arrangement.
Tongaat Hullet An offer to purchase Starafricas 33.3%
shareholding in THB for BWP51.2 million was 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. As reported on 23
January 2014,
a notice of intention to sell Starafricas 33.3% shareholding in
THB was given to THB and a formal 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 Signicant 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, verication, testing and certication 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 arrived at Durban Port and
are being
carted to Harare Renery or undergoing clearance at Durban Port.
Five containers comprising structural equipment have been
delivered
at Harare Renery. Fifteen to twenty more containers will be
shipped in the next two weeks, with the last lot of containers
being shipped
on or before 28 February 2014.
Installation is targeted to commence in the latter half of
February 2014 and the upgraded plant is anticipated to be
commissioned by 30
April 2014. The General Manager of GSSH, who is in India to
oversee the inspection, packing and shipment of the equipment, will
be back
in Zimbabwe towards the end of next week for commencement of
installation. Civil works have been completed and the site is ready
for
assembly and installation of the new plant and equipment.
We express our profound gratitude to National Social Security
Authority (NSSA), one of our major shareholders, whose immense
contribution and continued support has made the plant upgrade a
reality.
4. RAW SUGAR SUPPLY AND REFINING OPERATIONS Although an
Over-arching Toll Rening and del Credere Agency Agreement, which
was signed between Starafrica and the raw sugar
supplier, was implemented, and raw sugar could be supplied, the
sugar rening operations were suspended recently to make way for
the ongoing plant upgrade project. It is now projected that
rening operations will resume in May 2014 when the new plant has
been
commissioned.
5. MARKET UPDATE 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. It is anticipated that the revised duty structure will
progressively result in
an increase in the uptake of sugar from the upgraded plant by
both the industrial and direct consumption market segments. Subject
to
the exchange rate of the United States Dollar against the South
African Rand, it is anticipated that the Company will start
realising these
benets in the rst half of the 2014/2015 nancial year. However,
the depreciation of the Rand against the Dollar has made sugar
imports
from South Africa very competitive, and may negate the benets
realisable from the improved duty structure.
6. RESTRUCTURING Non- core businesses, being the retail outlets
in Gwanda and Hwange, Arthur Garden Engineering and Grant Chemicals
have been disposed
of in an effort to arrest the haemorrhaging that these
businesses were causing on the companys nances and concentrate
focus on the
core business of sugar rening. Consequent thereof, head count
for the Group has reduced signicantly. An Agreement of Sale,
being
in respect of the disposal of Polylm Plastics and Higheld Bag,
was signed with the purchaser on 17 January 2014. The disposal will
benalised in this quarter.
7. FEEDBACK Documents in support of the above update can be
inspected at the ofce of the Company Secretary at the address given
below. In addition
to the inspection, Scheme Members may provide feedback to the
Company Secretary on any issue relating to this update and the
Scheme.
We express our gratitude to all Scheme Members for their
invaluable support to this Scheme of Arrangement.
Starafricacorporation Limited
45 Douglas Road
Workington
Harare
Telephone numbers: 662117, 668149, 668902 / 0772 233 136-8
Email address: [email protected]
BY ORDER OF THE BOARD
A J Musemburi
Company Secretary
5 February 2014
(A public company incorporated in the Republic of Zimbabwe under
company registration number 18/35)
UPDATE ON THE SCHEME OF ARRANGEMENT BETWEEN
STARAFRICA AND ITS CREDITORS
www.starafricacorporation.com
