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order to retire its expensive debt, retool and recapitalise.
The diversified conglomerate has concluded the disposal of West Bev, a beverages manufacturer and they are in the process of disposing Redstar, which was listed on the Zimbabwe Stock Exchange.
Two other operations, Marathon Tyres and Arthur Gardens Engineering are also going under the hammer.
Disposal of Redstar is expected to be complete before the end of the first half of the current financial year.
During the group’s Annual General Meeting, shareholders also agreed to dispose of company assets amounting to about US$800 000.
Chief executive Mr Patison Sithole who gave a trade update for the first quarter of the year said the group continues with its restructuring exercise to concentrate on core business.
“The group will continue with its restructuring and dispose operations, which are not critical and remain with the core business of the group that is sugar refining, packaging and logistics,” Mr Sithole said.
Starafrica key business units include Gold Star Sugars, a sugar manufacturer, Country Choice Foods, which makes caster sugar, icing sugar and syrups.
Other business operations include property company Silver Star Properties, logistics firm Bluestar Logistics, packaging firms Highfield Bag and Ployfilm Plastics.
The group decided to shed off West Bev after intense competition and inadequate funding adversely affected the unit.
During the previous financial period some of the subsidiaries were temporarily closed pending restructuring.
Apparently, the beverages market is dominated by Delta Beverages, whose massive recapitalisation over the past two years has seen it reclaiming over 90 percent of the market.
Arthur Garden Engineering and Marathon Tyres have neither made significant contribution to the group’s financial position and it was clear the group was going to do away with these entities.
Redstar was struggling due to competition, debt and heavy losses due to thin margins. It failed to raise funding for recapitalisation and was largely dependent on the group.
Mr Sithole said the group’s star business Gold Star Sugar’s production increased 53 percent compared to the previous period.
Turnover for the group amounted to US$21,3 million up from US$16 million realised in the comparable period.
He added that the group was on target and is expected to return to profitability by full year 2013.
Starafrica last year managed to raise US$20 million through a combination of a rights issue and convertible debentures.
The group allocated US$11 million towards debt restructuring, US$5 million for working capital and the remainder went towards retooling and operations.
Starafrica has been struggling since dollarisation due to debt pressures resulting in the group posting losses.
Its performance on the bourse was depressed since the beginning of the year. The group started the year trading at US7c and on Friday closed at US1,7c representing a massive 75,7 percent loss.
Online Reporter