Zamco to purchase Star Africa’s $33 million debt

The State-owned pension fund will increase its shareholding from 24.08 percent to 30.70 percent under the new arrangement. Concurrent creditors will own 13.58 percent while the current Star Africa shareholders will remain with 7.29 percent.

NSSA has also agreed to also lend Star Africa $1.5 million working capital to refurbish the remaining 40 percent of its Harare Refinery.

The refurbishment is expected to be completed by year end.

It is currently owed $10 million, which along with the $1.5 million, will be consolidated into a new single loan.

Star Africa’s Harare Refinery and immovable properties at its head office will be used as security for the loan.

In 2012, NSSA loaned Star Africa $7 million for the refurbishment of 60 percent of its Harare Refinery, an arrangement which also gave the pension fund part ownership of the plant. But the commissioning was delayed and Star Africa has agreed to pay NSSA $3.7million in lost interest earnings and to cap such money at $10 million.

The two parties also proposed to defer all money due to NSSA for six months from the date of registering the scheme at the High Court.

“NSSA and Star Africa have agreed to cap the principle and the lost value to a maximum amount of $10 000 000,” said the company in a statement.

Star Africa will also receive another $1 million in working capital from BancABC, which at an interest rate of nine percent per annum, will become payable after six months of the scheme agreement.

Capital loans will result in an increase of borrowings to $40 million from $37.1 million.

The company also proposed a scheme with employees to settle wage and salaries in 16 months at a rate of 50 percent of the monthly arrears per month.

Meanwhile, refined sugar (monthly) production has increased to 5 085 tonnes in September from 1 120 tonnes in April.- The Source

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