Starafrica offered $5,6m for Tongaat Hulett stake

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EMBATTLED Starafrica Corporation said it has received a BWP51,2 million ($5,6 million) offer for its 33,3% stake in Tongaat Hulett Botswana (THB) while another offer has been made by a local company for it transport firm, Bluestar Logistics.

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In a statement on Thursday, the company which has been struggling since last year to dispose of the two assets said it was negotiating with new potential buyers and would pay creditors once payment had been received.

“An offer to purchase Starafrica’s 33,3% shareholding in THB for BWP51,2 million has been received from a prospective purchaser listed on the Botswana Stock Exchange and accepted by the company,” the statement read.

The company said it was expecting a response on March 5 on the pre-emptive rights by other shareholders for the deal to be concluded.
The disposal is expected to be completed and proceeds of the sale received by April 30.

The company said an offer to purchase Bluestar Logistics had been received from a prospective purchaser listed on the Zimbabwe Stock Exchange and “negotiations are at an advanced stage.”

“Proceeds from the disposals are to be applied towards the payments to be made to creditors,” said the company.

The assets to be disposed are estimated to be worth $10,4 million while the company’s debt is around $19,7 million.

Last year the High Court sanctioned a scheme of arrangement between the technically insolvent company and its creditors requiring it to dispose its two assets within six months from 14 August 2013 and settle its obligations.

However, there were some delays in selling off the assets with potential deals falling through last year although the company maintained that it would settle its debt when it fell due on February 14.

Meanwhile, the company’s new $5 million plant upgrade for its sugar refinery was expected to be completed by April 30 with the new equipment expected to lower operating costs and improve quality and output.

Turning to the supply of raw sugar to Goldstar Sugars Harare, the company said it recently suspended refining operations to make way for the ongoing plant upgrade project with refining expected to resume in May.

It said it would start benefiting from the measures put in place by government to support the local sugar industry through an improved import duty structure during the first half of the 2014/2015 financial year.

The company has been struggling financially after its losses worsened to $5,2 million for the half year to September 30 last year from $4,8 million during the same period in 2012. Revenue also fell sharply to $6,9 million last year from $17 million in 2012. The company’s liabilities exceed its total assets by $16,7 million while current liabilities exceed current assets by $8,2 million.

– The Source