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StarAfrica Pulls Out of Botswana

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HARARE – Ailing ZSE-listed sugar refinery StarAfrica Corporation (“starafrica”) is selling its lucrative 33% shareholding in Botswana’s Tongaat-Hullett (THB) to raise cash to pay off massive debts.
In a statement released in Harare last week, StarAfrica said it intended to dispose of its stake in THB for at least $4 million, subject to shareholder approval.
THB is Botswana’s largest sugar packaging and selling company.   It packages, distributes and markets sugar in Botswana under the brand name “Blue Crystals”, commanding 75 % of the country’s sugar and sugar products market.   THB’s annual turnover is $40 million and South Africa’s JSE-quoted Tongaat-Hullet Group holds 66,7% of the company’s equity.  The remainder (33%) belongs to StarAfrica.
As part of its restructuring plans to get back to profitability, StarAfrica announced that it intended to dispose of all non-core interests such as the profitable Blue Star Haulage.   Blue Star, formed to move raw sugar for StarAfrica, has diversified and now has huge contracts to move platinum concentrates and ore for Unki and Zimplats mines within Zimbabwe, and further on to refineries in South Africa.
To focus more on its traditional core business of refining sugar, StarAfrica is upgrading the Harare refinery for $5million and this is expected to be complete by the end of the year.
StarAfrica’s loss before tax for this year is $13,5 million compared to last year’s figure of $8,6 million.  It attributes the loss-making mainly due to delays experienced in the Harare plant upgrade and the plant shutdown of five months caused by the termination of a raw sugar supply agreement because of cash flow constraints.   The supply of raw sugar to the refinery has since been renewed.
StarAfrica is chaired by former Delta Zimbabwe CEO Joe Mtizwa, whose family trust is also one of the company’s major shareholders.

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