ZIMBABWE – The Zimbabwe Asset Management Company (ZAMCO) is planning at disposing its 57.4% stake in Star Africa corporation limited, manufacturing and marketing sugar-based products under the brand names, Goldstar Sugar and Country Choice Foods.
The sugar manufacturer, is among some of the companies that were on the verge of collapse because of debt and spiralling finance costs but were assisted by ZAMCO through non-performing loans (NPL) resolution processes reports business daily Zambia.
ZAMCO was established by the Reserve Bank of Zimbabwe in July 2014 as part of holistic measures to deal with problem of rising non-performing loans (NPLs) in the banking sector.
Thus, ZAMCO was set up with the specific mandate of efficiently resolving the non-performing loans of banking institutions in Zimbabwe through acquiring, restructuring and disposal of NPLs.
The CEO of ZAMCO, Cosmos Kanhai said that a proposal had been presented to its board on the matter of disposing Star Africa’s shares and is now awaiting approval.
He added that the move to dispose of the its stake had been necessitated by the turn around 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 (US$24,316) from a loss after tax of ZWL$3.8 million (US$10,500) recorded in 2018. This was attributed to an increase in volumes and cost management strategies.
In 2016, the sugar processor’s shareholders approved a scheme of arrangement in which its $32 million debt owed to different financial institutions to be converted to equity as part of restructuring the company’s balance sheet.
ZAMCO assumed the debt owed to seven financial institutions by the group as part of the secondary scheme of arrangement.
The scheme approved the takeover of principal debt as 2,760,284,842 ordinary shares at a price of 0.0125 per share.
As a result of the conversion, Zamco assumed controlling shareholder status in Star Africa corporation with 58% stake.
Star Africa Corporation’s product range comprises icing sugar, golden syrup, honey syrup and maple syrup for local consumption and for export to countries in sub-Sahara Africa.