Sugar refiner starafricacorporation says it has reached an agreement to sale subsidiary Bluestar Logistics but is still looking for takers for its 33 percent stake in Tongaat Hulett Botswana (THB) to raise funds to make part settlements to creditors and proposed a debt to equity swap to improve its balance sheet.
The company has been looking to sell Blue Star and the THB stake since 2013 without success after entering into a scheme of arrangement with its creditors when it failed to settle debts in excess of $20 million.
On Friday, it said it had signed an agreement of sale with an unnamed buyer for Bluestar.
“An agreement of sale was signed on 13 July 2015 with a prospective purchaser in respect of the disposal of Bluestar Logistics and it is anticipated that this transaction will be concluded by 30 September 2015,” the company said in a shareholder update.
It said efforts to sell the THB stake were ongoing, although an official has said this was unlikely because the company remained a core asset whose dividends could be used as working capital.
The company is also seeking shareholder and creditor approval for a debt to equity swap which would improve its liquidity.
“Given the urgent need to restructure the company’s liquidity and solvency position, and subject to approval by shareholders and creditors, and complying with the Zimbabwe Stock Exchange listing and regulatory requirements, the board of directors of the company has approved the issuance of shares by the company to all its creditors as a means of settlement of debts and strengthening the company’s balance sheet and enhancing its operating capacity,” it said.
The company said it will convene meetings for the shareholders and creditors to consider the proposal.-The Source
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