adminWest Star acquired 100 percent shareholding of Red Star from the previous owner Star Africa Limited for a cost of US$2 million.
The buyout was driven by Star Africa’s failure to raise US$10 million required to recapitalise the company.
Initially, West Foods Group had targeted to acquire Jaggers Wholesalers but the deal flopped.
The new company has acquired Red Star’s Harare and Bulawayo wholesale branches for US$750 000 excluding debt.
Speaking at a press conference to mark the name change, West Star chief executive officer, Ken Sharpe, said shareholders saw it befitting to coin the new name.
“We reintroduced the brand under the Red Star trademark after we had purchased the wholesale from Star Africa and we have found it necessary to change it to West Star,” he said.
Sharpe said West Group was still seeking to list the brand on the Zimbabwe Stock Exchange (ZSE).
Red Star was de-listed from the ZSE last year in December after majority shareholder Star Africa bought out minority shareholders.
Sharpe said the wholesaler would soon open a new branch in Chinhoyi.
“We have opened branches in Tsholotsho, Marondera, and Mutoko,” he said.
“We intend to open another branch in Chinhoyi next week to make the total 5 and we will continue to expand.”
In compliance with the indigenisation policy, Sharpe said West Star customers will acquire one percent shares each for purchasing from the wholesale.
“In this way, we will be ensuring that we stay in business,” he said.
“Every customer will be given a credit loyalty card and we will ascertain the amount they would have contributed in order for them to qualify to get one percent shareholding in West star.”
The company expects turnover of US$200 million in three years and believes it is on course to hit US$50 million mark next year. — New Ziana.
Online Reporter