Zamco begins process to dispose of Star Africa stake

Zamco begins process to dispose of Star Africa stake
Published: 23 September 2019
The Zimbabwe Asset Management Company (ZAMCO) is now looking at disposing its 57.4% stake in Star Africa.

The sugar manufacturer, is among some of the companies that were on the verge of collapse because of debt and spiraling finance costs but were assisted by ZAMCO through non-performing loans (NPL) resolution processes. Other companies includes, RioZim, the Cotton Company of Zimbabwe, Cairns, The Wattle Company, Chemplex Corporation and David Whitehead.
CEO Cosmos Kanhai said that a proposal had been presented to the board and is now awaiting approval. "Disposing of our stake in Star Africa is a proposal that we made to the board  and all we are waiting for now is for the board to meet and deliberate on the matter."

He added that the move to dispose of the shareholding had been necessitated by the performance of the company. "This is out of the fact that the company has turned around. In this case we will be selling at profit," said Kanhai.

In the year ended March 31, 2019, Star Africa reported an after tax profit of ZWL$8.8 million from a loss after tax of ZWL$3.8 million recorded in 2018. This was attributed to an increase in volumes and cost management strategies.

ZAMCO acquired control of StarAfrica following the firm's debt to equity conversion in 2018, which was part of the company's scheme of arrangement. Previously, ZAMCO applied for and were granted, a 12-month waiver by the Zimbabwe Stock  to dispose of excess shareholding to other parties and to sell if the share price reaches $0.03 cents, so as to reduce its shareholding to less than 35%.

 On the local bourse, StarAfrica share is currently trading at $0.018 cents, with an ytd of (+38.46%) and a market capitalization of $84.87 million.

Meanwhile, the Competitions and Tariff Commission board gave the final approval for the sale of Edcon Limited's 100% stake in Bellfield Investments, which in turn holds a 41% stake in Edgars Zimbabwe to Sub-Sahara Capital Group (SSCG) Holdings. The approval was made on August 28, 2019. Edgars Zimbabwe will maintain the brand after the sale.

- finx
Tags: zamco,


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