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Starafrica corporation group chief executive Dr Sam Mushiri said after the EGM that the scheme would become operational once it has been approved by the High Court early next month.
“We are on course. We are now going to gather on August 7, 2013 in the chamber and the scheme will be operational”.
While the scheme entails a number of strategies to turn around Star Africa Corporation’s fortunes, the main issue on the agenda at the EGM was considering disposal of some assets to enable the firm to raise funds to clear some of its debts.
Dr Mushiri said he was always confident that the company’s shareholders would endorse the scheme arrangement because it made little sense to reject the scheme. Major shareholders in the sugar processing company include the National Social Security Authority (18 percent), ZSR Investments UK (14 percent) and Old Mutual (10,7 percent).
The approval by shareholders follows a similar endorsement by Star Africa Corporation lenders and creditors who approved the scheme to give the sugar processing company time to sort out its plan to the overdue liabilities. The scheme provides that lenders and creditors, owed by the company a total of US$19,7 million, would not be paid for months to allow the company to work on its payment plan.
The six-month moratorium would allow Star Africa Corporation to sell some of its assets to partially settle liabilities immediately thereafter while the balance would be staggered over 32 months depending on the nature of liability.
The company had faced a bleak future amid reports some of the creditors had started legal action against the company. The approval by shareholders, creditors and lenders of the company means that after the High Court meeting next month directors can proceed to sell the firm’s assets to pay debts.
Star Africa Corporation directors proposed to dispose of its 33,3 percent stake in Tongaat Hulett Botswana and its entire shareholding in transport concern Blue Star Logistics. The scheme of arrangement will also see the company upgrading its sugar refinery plant in Harare to improve the quality of sugar required by bottlers from 40 to 100 percent.
Online Reporter