adminstopped operations in June this year after the company failed to pay for raw sugar supplies by South Africa’s Tongaat Hulett.
The company said in results to September 30 this year, it had engaged Tongaat Hulett to extend a US$6,8 million revolving sugar supply facility to enable it to resume operations.
The last revolving facility had been fully utilised and supplies were suspended because starafrica had not been able to pay the South African company.
“The period to the end of the financial year looks promising, with raw supplies to Gold Star Sugar (the refinery) having been resorted and arrangements for the upgrading of the plant having reached an advanced stage,” chairman Mr Joe Mtizwa said.
Gold Star sold 9 749 tonnes of refined sugar for the half year to six months to September compared with 31 148 tonnes produced during the same period last year.
Mr Mtizwa said the plant refurbishment would take eight months to complete, and “will result in an increased capacity, better sugar quality and improved efficiencies”.
In the six months to September, starafrica’s turnover declined 42 percent from US$ 29,8 million to US$17,4 million, underlined by reduced business in the core area of sugar manufacturing.
Losses from continuing operations increased further from US$1,6 million recorded in the previous period to US$4,7 million in the period under review.
The company’s cash-flow position improved for the period under review from outflow of US$1,2 million to US$667 000.
There is a decrease of borrowings from US18,5 million to US15,7 million. But short-term borrowing increased from US$7,5 million to the current US$10,6 million.
Current liabilities at US$25,4 million are three times higher than current assets at US$7,3 million, showing that any demands from creditors can result in a liquidity crunch.
Online Reporter