SACL | Scheme of arrangement between Starafrica and its Members and its Creditors

Published: 06 June 2014

1. SCHEME OF ARRANGEMENT

The Scheme of Arrangement between Starafricacorporation Limited (“the Company” or “Starafrica”) and its members and creditors (“the Scheme Members”), which was sanctioned by the High Court on 7 August 2013 and registered with the Registrar of Companies on 14 August 2013, requires that updates be furnished to Scheme Members. Further to the updates published in the Herald on 27 September 2013, 19 December 2013, 23 January 2014 7 February 2014 and 14 March 2014, Scheme Members are advised of progress on the Scheme as described below.

2. PLANT UPGRADE

Significant progress has been made on the plant upgrade project at Goldstar Sugars Harare (“GSSH”). All the equipment has been manufactured and inspected by Societe Generale de Surveillance (“SGS”), a leading global inspection, verification, testing and certification services provider. All 47 containers have been shipped of which 41 containers have been delivered at Harare Refinery and the balance will be delivered to site within the next 7 days. Installation of the new equipment is ongoing and is ninety five percent (95%) complete. Hydro-static and pressure testing is in progress in respect of the relevant vessels. Cabling, pipe-work and fitting of instruments are ongoing. On installation, the only outstanding vessels are the surface condensers whose delivery is scheduled for next week. The installation work is being carried out under the supervision of the ICCPL engineers. Commissioning of the upgraded plant is anticipated for the latter half of June 2014.

3. DISPOSAL OF ASSETS

The Scheme prescribes the disposal of Starafrica’s investment in Tongaat Hulett Botswana (“THB”) and Bluestar Logistics (“BSL”) within six (6) months from 14 August 2013. Proceeds from the disposals are to be applied towards the payments to be made to creditors. However, Scheme members should note that the Bluestar Logistics disposal is neutral to the Scheme of Arrangement as the proceeds of the disposal would be applied towards settlement of the vehicle finance loan and transaction costs.

Earlier efforts to dispose of THB and BSL, as reported in previous updates, have not yielded the intended results as the prospective purchasers failed to raise the funds thereof. Fresh efforts were then made to approach other prospective purchasers, as follows:

Blue Star Logistics

Two prospective purchasers are carrying out due diligence and Scheme Members will be advised of progress in the next update. It must be pointed out that while there is interest on the local market for this asset, the liquidity crunch obtaining in the economy is militating against an expeditious disposal thereof.

Tongaat Hullet Botswana

A prospective purchaser is in the process of conducting due diligence on this asset, with cooperation from Starafrica and the other shareholders in THB. Scheme members will be advised of progress on this transaction in the next update. This is a good asset, whose disposal must yield maximum value, hence the need to allow due process in respect of its disposal.
- SACL

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