Published: 11 May 2018

THE Zimbabwe Asset Management Company (Zamco) has snapped 58,34 percent of troubled sugar processor, Starafrica Corporation.

In a joint statement yesterday, the two companies said the take over of a majority stake in Starafrica by Zamco was in pursuant to a debt equity conversion announced last month.

In 2016, the sugar processor's shareholders approved a scheme of arrangement in which its $32 million debt owed to different financial institutions would be taken over by Zamco.

The perennial loss making Starafrica has defaulted on paying its creditors and of the $32 million debt, BancABC was owed $16 million while Afreximbank was owed $11 million. Other lenders were the Infrastructure Development Bank, Stanbic Bank Zambia and the now defunct Kingdom Bank with each owed $1,8 million, $0,6 million and $2,6 million respectively. "Following the conversion of its preference shares at a conversion price of $0,0125 per share, Zamco is now the beneficial owner of 58, 34 percent of the ordinary issued share capital of Starafrica," reads the statement.

Paragraph 3 of the Zimbabwe Stock Exchange (ZSE) Listing Requirements places an obligation on Zamco to extend an offer to buy shares from the holders of the remaining Starafrica equity share capital on terms that are at least similar to the conversion terms (at a price $0,0125 per share or more).

"To this end Zamco applied for, and were granted, a 12 month waiver by ZSE on conditions that the waiver is valid for a period of 12 months to allow Zamco to dispose of the excess shareholding to another party or parties.

"Zamco will immediately sell on the market a portion of Zamco's shareholding in Starafrica if the share price reaches $0,03, so as to reduce its shareholding to less than 35 percent," it said. Zamco is a special purpose vehicle established by Government in 2014 to buy-out non-performing loans from banks and clean their balance sheets.

The asset management firm has previously also bought bad debts from resources group RioZim.

- the herald

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