adminTinashe Makichi Business Reporter
Listed sugar refiner, starafrica corporation is considering a debt to equity swap to clear its debt which is now sitting at $60 million while also searching for a strategic investor to fund the business.
Speaking on the sidelines of the company’s annual general meeting yesterday starafrica chairman Mr Joe Mutizwa said the company is considering to engage a strategic partner but clearing of the company’s debt remains the primary objective.
“We are looking at a debt to equity swap to wipe out the debt and that is our objective, we may not get that but that remains our objective. Once that is done then we will start talking to a strategic partner who will fund the company’s operations.
“If you look at our balance sheet at the moment our debt currently sits at $60 million and no company can operate like that. When the new board came, it was sitting at around $45 million but with interest it has since increased,” said Mr Mutizwa.
Giving a trading update for the five months to August 2015, starafrica chief executive Mr Regis Mutyiri said the trading environment remains challenging and as such Gold Star Sugars Harare traded at a subdued level due to the ongoing plant upgrade and working capital constrains.
He said Country Choice Foods operated profitably during the period under review while volumes at Blue Star were adversely affected by the impasse between regulatory authorities and platinum producers on the 15 percent tax levied on platinum concentrates.
“This resulted in this business not generating any revenue on its long term contracts for transporting platinum exports to South Africa during the first quarter. This has since been resolved and the business is now running profitably,” said Mr Mutyiri.
During the period Mr Mutyiri said the upgraded plant at Gold Star Sugars Harare has been assessed by independent sugar technology consultants from South Africa who confirmed that the new equipment has been installed correctly and functioning well.
Mr Mutyiri said production will then be ramped up to 600 tonnes per day with technical assistance from Global Can Sugar Services of India, with a view of commissioning the plant by the end of the calendar year.
“ICCL who were assisting us with plant integration have now moved off-site and will be replaced by GCS. Pending commissioning, the plant is operational and during the period it produced 3 607 tonnes of refined sugar over a period of six weeks but had to be shut down due to working capital constraints and subdued off-take by the market as a result of lower priced imports.
“Production resumed this month and is targeted to consistently hit 300 tonnes per day,” said Mr Mutyiri.
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