Star Africa engages consultancy firm for new plant

Starafrica Corporation has engaged the services of a consultancy firm Head Hunters International to recruit and operate the value chain of its Goldstar Sugar Plant in Harare.

Head Hunters consultancy is a Human resources consultants firm in Zimbabwe which also handles a number of assignments in the region mainly in Mozambique, Zambia and South Africa.

Among its services is organisational development which entails organizational restructuring and functional analysis, strategic planning facilitation, management of transformation and change initiatives and development of employee resourcing strategies and flexible staffing among others.

According to an internal source, the consultancy firm will manage production up to sales level as the group seek to maximise on the new plant.

“It has been contracted to recruit labour for sugar production as well as sales, so basically it’s managing end to end production and sales,” says the source.

Star Africa is currently in the final stages of commissioning its upgraded Gold Star Harare plant. The company is still operating under a scheme of arrangement that was sanctioned in 2013 by the High Court.

The Scheme of Arrangement between the company and its creditors required it to dispose of two assets Blue Star Logistics and Tongaat Hulett Botswana (THB and settle its obligations but the company has been struggling to find buyers.

With regards the new plant, the company is targeting to constantly produce at 300 tonnes per day before ramping up production to 600 tonnes per day at commissioning.

In the five months to August 2015, the plant produced 3 607 tonnes of refined sugar over a period of six weeks

As the company is still in default on part settlements and subsequent instalments under the scheme of arrangement, the group will soon seek shareholder and creditors approval for a debt –equity swap deal to free the balance sheet upon which the company will bring in a new investor to fund working capital requirements. The company is sitting on debt of above US$60 million. FinX

from http://www.financialgazette.co.zw/star-africa-engages-consultancy-firm-for-new-plant/

ZAMCO to take over 32m starafrica debt

Sugar processor Starafrica Corporation Limited’s shareholders yesterday approved a scheme of arrangement in which the company’s $32 million debt owed to different financial institutions will be taken over by the Zimbabwe Asset Management Company.At an extraordinary general meeting held in the capital yesterday, shareholders approved all the ten resolutions that were on the agenda seeking to convert debt to equity as part of restructuring the company’s balance sheet.

The perennial loss making company defaulted on paying its creditors in terms of its scheme of arrangement. Of the $32 million debt, BancABC was owed $16 million while Afreximbank was owed $11 million. The other lenders are the Infrastructure Development Bank, Stanbic Bank Zambia and the now defunct Kingdom each owed $1,8 million, $0,6 million and $2,6 million respectively. “The ZAMCO Scheme is entered into with ZAMCO, on the understanding that ZAMCO has separately or will soon acquire the agreement of each of the lenders, to cede and assign their loans to the company, to ZAMCO,” said starafrica.

The shareholders also approved the National Social Security Authority and the Zimbabwe Sugar Sales schemes. As at March 2016, starafrica owed $10 million to the ZSS and $10 million to NSSA, which was for the plant upgrade.

At starafrica’s request, NSSA agreed to provide further funding of $1,5 million working capital. “It has also been agreed that the $10 million will be combined with the $1,5 million funding into new convertible consolidated loan,” said starafrica. Management at starafrica said this gave the company a fresh breath with a clean balance sheet and prospects were high for the sugar refiner.

In August 2013, starafrica concluded a scheme with its creditors and suppliers, which was sanctioned by the High Court and registered with the Registrar of Companies. This Initial Scheme was put in place due to the severe working capital and solvency constraints faced by the company on the back of declining yields and lower quality of refined sugar from the Harare sugar refining plant which required significant upgrade. Additionally, the company faced high competition from imports and a balance sheet burdened with the debt of liquidated subsidiary companies that starafrica had guaranteed.

According to its financials, starafrica has over the last six years been reporting significant losses. As at full year to March 2016, the sugar processor reported a net loss of $10,2 million with current liabilities exceeding assets by $62 million. from: http://www.herald.co.zw/zamco-to-take-over-32m-starafrica-debt/

Starafrica sells Bluestar for $1,5m

Starafrica Corporation has sold Bluestar Logistics to a local private company for $1,5 million. The purchase price comprised a deposit of $200 000 with the balance being paid in equal instalments over a period of 13 months, Starafrica said in a statement yesterday. Bluestar’s profitability was negatively affected by low business volumes from Goldstar Sugar Harare, a sugar refining division of Starafrica and the impasse between platinum producers and Government on taxrelated issues, the company said in December.

“In terms of the loan agreement between PTA Bank and Starafrica, the purchaser paid deposit and will pay the balance of the purchase price, directly to PTA Bank as part of settlement of the debt owed to PTA Bank by Starafrica corporation,” said the company. However, the company is still looking for buyers of its 33 percent shareholding in Tongaat Hullet Botswana. The disposals are part of the scheme of arrangement entered into with creditors and lenders in August 2013.

The company did not provided an update on operations. But in December last year, it said the integration of its sugar refinery, Goldstar Sugar in Harare would be completed during this quarter. This will see the company doubling daily capacity to 600 tonnes. Currently, the company is producing 300 tonnes per day, enough to meet demand from retail and industrial consumers. The group’s revenue increased to $6,6 million in six months to September last year from $2,8 million in the previous comparable period due to increase in sugar sales,” Starafrica said.

Loss for the period was $5,2 million from $3,1 million. The group’s total assets stood at $37 million against total liabilities of about $73,5 million. Short-term loans and borrowings stood at $36,7 million, up from $31,9 million while other current liabilities increased to $28,3 million from $25,4 million. Long term loans and borrowings declined to $6,3 million from $9,4 million. from: http://www.herald.co.zw/starafrica-sells-bluestar-for-15m/