LISTED sugar manufacturer, Star Africa Corporation Limited (SACL) says it has settled 99.9 percent of its creditors, putting it well on course to meeting the Scheme of arrangement deadline whose tenure expires this year.
SACL struggled to settle a US$19,7 million debt due to its insolvency position, prompting the lenders and creditors to approve the 2013 scheme of arrangement which outlined a debt repayment strategy.
In its six months to September 2021 trading update, the group said it managed to pay an equivalent of ZWL$654,451 at the ruling exchange rate as a final payment to an offshore creditor which extinguished the last of the Group’s foreign currency denominated obligations.
“The Scheme of arrangement, whose tenure expires in 2022, remains in place with 99.9% of creditors having been settled. During the period under review an amount equivalent to ZWL$654,451 was made as a final payment to an offshore creditor which extinguished the last of the Group’s foreign currency denominated obligations,” the group said.
Progress to date on the debt clearance strategy has not only reduced the interest burden but also contributed to the further strengthening of the Group’s financial position.
The company said efforts to trace the whereabouts of the few remaining local scheme creditors were ongoing.
“Management continues to engage the remaining creditors with a view to conversion but is also confident of meeting the eventual settlement requirements should the creditors hold out to the end of the Scheme in February 2022,” said the group.
During the period under review, the group recorded an increase in earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) ZWL$579.68 million from ZWL$482.01 million in the prior comparative period.
The balance sheet is in a strengthened position with a net asset position of ZWL$2.02 billion against ZWL$1.86 billion that was recognized as at 31 March 2021.
As a result of the comprehensive capital investment and equipment maintenance plan, the group flagship subsidiary, Goldstar Sugar Harare sold 39,294 tonnes against 26,959 tonnes sold in the prior year comparative period.
The procurement and commissioning of two new centrifugal machines, an effluent treatment plant, an injector pump, coupled with the rigorous plant maintenance regime that has been put into effect, are expected to augment throughput in the second half of the year to fully satisfy local demand.
The procurement and commissioning of the syrup filling machine and the icing packing machine at Country Choice Foods in the second half of the year are also expected to further boost production at the unit through automation of some production processes.
