Starafrica to offload Spar franchise

its wholesale unit Red Star.
Red Star, winding up operations after delisting from the ZSE, holds a 75 percent stake in Advance Wholesalers that incorporates the Spar franchise.
In Zimbabwe, Advance Wholesales administers the Spar franchise in the south-western region while Innscor is in charge of the north-eastern region.
Company sources last week said starafrica was facing serious liquidity problems.
They pointed out that the company did not have enough funds to buy stocks for distribution centres where other retailers using the Spar franchise are supposed to buy a certain percentage of their stock.
“The management has decided to sell the Spar franchise that it holds through Red Star’s Advance Wholesalers,” said one source.
starafrica has no capacity to continue restocking the distribution centres for the southwestern region.”
Red Star acquired Advanced Wholesalers in 2003. It operates six branches.
starafrica chief executive Mr Patison Sithole said details on the deal would be incorporated into the company’s financial results this week.
“We are publishing our financials next week and the statement will incorporate details on that transaction,” said Mr Sithole last Friday.
starafrica has already issued a loss-warning statement to shareholders.
Since the beginning of the year, its shareholders lost US$9,6 million, with former Red Star stockholders losing 67 percent of their investments following their integration into the conglomerate.
Red Star shareholders went into starafrica using a conversion price of US6c compared with prevailing US1,9c.
At the beginning of the year starafrica was valued at about US$13 million and was trading at about US7c.