Star Africa scheme update

Published: 07 February 2014

The Scheme of Arrangement between Star Africa Corporation Limited and its lenders and creditors which was sanctioned by the High Court on 7 August 2013 and registered with the register of companies on 14 August 2013 requires that updates be furnished to all scheme members.

The disposal of the company's investment in Tongaat Hulett Botswana and Bluestar Logistics should be complete by 28 February 2014 and proceeds from the disposal are to be applied towards the payments to be made to creditors. Negotiations with a prospective purchaser of Blue Star Logistics are nearing conclusion, proceeds of the disposal remaining after settlement of the vehicle finance loan and transaction costs shall be deposited into a trust account.

An offer to purchase Starafrica's shareholding in Tongaat Hullet Botswana for BWP 51.2m was received from a prospective purchaser. The offer is subject to the exercise of pre-emptive rights by the other shareholders in Tongaat Hullet Botswana and the conclusion of legally binding agreements with the prospective purchaser.

Considerable progress has been made on the plant upgrade project at Gold Star Sugars Harare. Approximately 94% of the equipment has been manufactured of which 70% has been inspected by Societe Generale de Surveillance, a leading global inspection, and verification, testing and certification services provider. Installation is targeted to commence in the second half of February 2014 and the upgraded plant is expected to be commissioned by 30 April 2014.

The sugar refining operations were recently suspended to pave way for the ongoing plant upgrade project. Refining operations are projected to resume in May 2014 when the new plant has been commissioned.

Non-core business that is the retail outlets in Gwanda and Hwange, Arthur Garden Engineering and Grant Chemicals have been disposed in an effort to seize the haemorrhage that these businesses were causing to the company's finances and focus on the company's core business of sugar refining. Consequently head count of the group has reduced significantly. Plans to dispose of Polyfin Plastics and Highfield Bag are at an advanced stage and the disposal should be completed in this quarter.
- businessdaily