Zamco to dispose of its Starafrica stock

HARARE - The Zimbabwe Asset Management Corporation (Zamco) says it intends to dispose some of its shareholding in Starafrica Corporation (Starafrica) if the sugar producer’s stock price reaches three cents.

Zamco acquired control of Starafrica following the company’s debt to equity conversion earlier this year, which was the company’s effort to clean up its balance sheet, that saw Zamco’s shareholding in the company increasing to a majority 58,34 percent.

Zimbabwe Stock Exchange (ZSE) listing regulations place an obligation on Zamco to extend an offer to purchase shares form the holders of the remaining Starafrica equity share capital on terms that are at least similar to the debt to equity conversion terms, that is, at a price of $0,0125 or 1,25 cents per share or more.

Zamco announced in a statement yesterday, that it has been granted a waiver by ZSE, on the obligation to offer to purchase the remaining shares in Starafrica.

Zamco said the waiver which is for a period of 12 months, is on the condition that it sells its Starafrica stock to reduce its shareholding to less than 35 percent, should the price of the stock reach three cents during the tenure of the waiver.   

“Zamco applied for, and were granted, a 12-month waiver by ZSE on the following conditions: The waiver is valid for a period of 12 months to allow Zamco to dispose of the excess shareholding to another party/parties; and Zamco will immediately sell on the market a portion of Zamco’s shareholding in Starafrica if the share price reaches $0,03, so as to reduce its shareholding to less than 35 percent,” read the statement.

The Starafrica stock closed trading at $0,017 or 1,7 cents on Wednesday following a fall, spurred by the market bear run which just ended, from a recent peak of $0,025 or 2,5 cents in November.

The last time the stock traded for three cents or more was in April of 2011.

The announcement follows ZSE’s listing of the Starafrica shares from the debt to equity conversion.

The local bourse this week added 4 184 664 558 shares of the counter to bring the total number of shares in the company, listed on the market to 4 715 084 058.

The central bank established the Zamco to absorb NPLs that had reached alarming levels in the aftermath of the introduction of the multi-currency regime in 2009, it has bailed out some local companies and parastatals that were struggling.

— The Financial Gazette

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