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:

Starafrica upbeat on new sugar import tax

SUGAR producer Starafricacorporation expects to enjoy the positive impact of a new sugar import tax regime in the next quarter of its financial year as demand for the local product is seen booming when imported stock runs out, an official has said. Fidelity Mhlanga Company chief executive Regis Mutyiri last week told shareholders at the company’s annual general meeting that the business enjoys 80% market share for sugar supplies to industrial companies and 20% direct consumption.

“Government introduced the 10% plus US$100 duty on sugar and that made our sugar competitive because our major customers are the industrial companies which were the major importers of sugar,” Mutyiri said. “When the Minister of Finance (Patrick Chinamasa) imposed the duty it enabled us to sell our sugar to the local market.”

Chinamasa introduced a 10% custom duty plus US$100 per tonne on imported to limit sugar imports that were beginning to take a toll on local industry. He said local producers have capacity to adequately supply the Zimbabwean market and export surplus.

Prior to the new tax system, Starafrica had shut down its production plant for two months only to resume production mid-September 2015. Now, the company targets to produce 300 tonnes per day by next month.

“The shut down was caused because we were now producing sugar just for piling and this resulted in working capital constraints,” Mutyiri said. Mutyiri added Starafrica plans to lobby government to put in place a reference pricing duty structure similar to the one obtaining in the region to ensure locally produced sugar remains competitive.

Starafrica’s upgraded plant at its Goldstar sugar Harare, according to Mutyiri, was assessed by independent sugar technology consultants from South Africa who confirmed that the new equipment had been installed successfully.

The same consultants have also recommended some remedial work on 40% of the plant which has not been upgraded at a cost of US$300 000. The firm acquired US$7 million equipment from Integrated Casetech Consultants (Private) Limited (ICCPL) of India for upgrading the plant. Mutyiri said production will gradually increase to 600 tonnes per day with technical assistance from Global Cane sugar Services of India (GCS), with a view to commissioning the plant by end of the calendar year. “We have concluded a sugar distribution arrangement with a wholesaler with a country wide depot network. This will make Goldstar white sugar readily accessible in all corners of the domestic market and boost sales volumes for table sugar,” he said.

Starafrica has engaged key creditors and shareholders with an option to restructure it’s balance sheet. A circular to shareholders is being worked on by the company with a view to holding an extra ordinary general meeting (EGM) of shareholders on or before November 30 2015 to consider and, if though fit, to pass the resolutions paving the way of the requisite creditors meetings and balance sheet restructuring.

The company said volumes at its transport unit Bluestar Logistics were adversely affected by the impasse between regulatory authorities and platinum producers on the 15% tax levied on platinum concentrates resulting in the business not generating any revenue on its term contracts for transporting platinum exports to South Africa during the first quarter. from:

Starafrica seeks funds for plant upgrade

Diversified conglomerate starafricacorporation Limited will spend $300 000 for remedial work to upgrade the remaining part of the Goldstar Sugars Harare plant in line with recommendations made by an independent sugar technology consultancy firm from South Africa.


The group has now upgraded 60% of the plant and is seeking external funding for the remaining 40%. The total cost for the upgrade is $7 million.

Speaking at their annual general meeting in Harare yesterday, starafricacorporation chief executive officer Regis Mutyiri said the company requires funding to finish the upgrade.

“We are negotiating with suppliers to give us terms and some of our shareholders to assist us, but we have made progress because we got support from some of our stakeholders and also support from the suppliers, who are going to do the technical consultancy in terms of staggering the payments,” Mutyiri said.

The upgrade will see output doubling to 200 000 tonnes of sugar per annum.

Mutyiri said orders had been placed for equipment to carry out the remedial work, which is scheduled to be completed by mid-October 2015.

Currently, starafricacorporation’s market is 80% towards industrial sales or the manufacturing sector who use the sugar in producing their products while the other 20% is sold for direct consumption.

“The funding is what we require now as we have upgraded 60% of the plant and then the 40% but because these are two machines and we want to join them together to integrate, so that is the funding which we are talking about,” Mutyiri said.

Integrated Castetech Consultants Pvt Ltd were hired to help assist the company with the plant integration but have now moved offsite and will be replaced by Global Canesugar of India who will now provide technical assistance.


StarAfrica to settle debts

SUGAR processor starafricacorporation says it is now in a position to commence repayments to its creditors before the year closes barely a week after its creditors demanded that the company be liquidated because it is failing to pay them their dues that US$19,7 million.

In a communication to shareholders, StarAfrica said improved performance at its Harare sugar refinery plant since its upgrade has capacitated the firm to pay its debts. “The Plant Upgrade at Goldstar Sugars Harare is in the final phase of commissioning, with quality product already being supplied to the market. Consequent thereof, the Board of Directors of starafricacorporation Limited resolved that dividends from the Company’sinvestments be applied towards settling Scheme Creditors, pending their disposal as specified in the Scheme of Arrangement,”said the company in a statement.

“The Company expects to receive dividends in December 2014 and is pleased to advise Scheme Creditors that an amount of around, but not less than, one hundred thousand United States Dollars ($100 000) will be paid out to Scheme Creditors on or before 31 December 2014 in part settlement of debts owed to them at the time of the Scheme. The payments will be made pro rata to the amounts owed.”

After a meeting on 21 October, starafrica creditors are said have demanded liquidation of the company following an unsuccessful scheme of arrangement. “They (creditors) did not mince their words. It appeared they had laid out plan when they got into the meeting demanding that he firm be liquidated as they felt they was not progress as far as recapitalsing the company was concerned,” an insider said.

starafrica corporation shareholders last year in July approved a scheme of arrangement that entails a cocktail of measures meant to turn around the ground fortunes. Seventy-two percent of proxies, presenting 372 million shares, who participated in the company’s extraordinary general meeting.

After the AGM starafrica announced that it would dispose its transport company and its stake in Tongaat Hulett Botswana for US$6 million to offset part of the company’s US$19,7 million debt. The company then agreed with creditors and lenders that it would not make payments for six months in order to dispose of assets worth about US$10,4 million to retire debts.

The balance from the US$19,7 million owed to creditors and lenders would then be paid over a period of 36 months for unsecured lenders and creditors and 18 months for the secured lenders and creditors of the troubled company. After the meeting the company is said to have engaged “potential investor” to address the creditors concerns. This resulted to the company releasing a cautionary statement advising shareholders to trade with caution when dealing with the company’s shares.

“The directors of starafricacorporation Limited (“the Company”) wish to notify all shareholders that the Company is involved in discussions that may lead to transactions which may have a material impact on its share price. Shareholders are advised to act cautiously when dealing in the Company’s shares,” read the cautionary statement.

At the company’s Annual General Meeting on 29 September this year, starafrica said it had achieved three of its four key deliverables aimed at restoring production and is currently operating at 40 percent, targeting full capacity upon completion of the new plant commissioning.

Chief executive Sam Mushiri said the company expects full production of 600 tonnes a day in the 2015 /16 period after completion of plant upgrade exercise at the Gold Star Harare plant. Starafrica, which reported a US$12,2 million loss for the year to March 31, 2014, has also been confronted by cashflow problems that have forced its board and management to redefine the business.

The bloodbath at starafrica, which had reported a US$16,4 million loss last year, put under the spotlight the choice for conglomerates as business models in Zimbabwe, where TN Holdings Limited has crumbled, while former Zimbabwe Stock Exchange blue chip, TA Holdings, has recently been finding it tough to spring out of the red line.

A US$35 million working capital black hole has cracked through the starafrica balance sheet, after current liabilities remained high during the review period, as current assets crashed. The deficit stood at US$30,6 million during the prior comparative period in 2013. The company had a combined US$35,4 million in current and non-current loans and borrowings during the period. Current liabilities, the short-term dues that starafrica owed to stakeholders, stood at US$36,5 million during the full-year to March 31, 2014, with current assets closing at US$1,5 million, which translated into a negative US$35 million working capital.

Total liabilities exceeded assets by a massive US$23,2 million during the period, placing its going concern status into question, and its ability to ride over deadly headwinds triggered by a contracting economy into doubt. The financial results means the group whose interests span from logistics, sugar refinery, chemicals, food processing and properties, also lacked funding to lubricate its day to day functions as executive management and directors have failed to stem the hemorrhage.



Starafrica Corporation Limited – Notice To Shareholders And Repeat Cautionary Statement

The Directors of Starafrica advises that in an Order dated 8th May 2013, the High Court under case number HC3267/13 granted the company leave to convene meetings with classes of all lenders and creditors under the chairmanship of Mr. Justice Leslie Smith (Retired) to consider a scheme of arrangement proposed by Starafrica.

Read more “Starafrica Corporation Limited – Notice To Shareholders And Repeat Cautionary Statement”

ZSR Corporation Limited Rebrands

ZSR Corporation Limited rebrands to starafricacorporation limited

In order to be representative of a diversified profile, relevant to the times and in chosen markets and true to the Group’s vision, ZSR Corporation limited has rebranded to starafricacorporation limited. The starafricacorporation limited vision is to be a leading manufacturer and distributor of food and other products in Africa.