AFRICAN Banking Corporation Holdings (ABCH) has sold part of its shareholding in Starafrica Holding Ltd as part of the banking group’s plans to stick to its core business.
According to Starafrica’s shareholder register, Starafrica Corporation Investments Limited — an investment vehicle controlled by ABCH majority shareholders businessmen Oliver Chidawo and Douglas Munatsi — disposed of its 7% shareholding in Starafrica Holdings Ltd.
Two parcels of 32 million Starafrica shares were snapped up on the market last month by National Social Security Authority (NSSA), one of the few liquid entities on the market.
NSSA paid 12,5 cents for the shares worth US$8 million.
But Starafrica Corporation Investments still owns 30,6% of the sugar producer followed by Old Mutual with 12%.
The disposal could see NSSA sending its own representatives to the board of the listed conglomerate.
When reached for comment ABCH CEO Douglas Munatsi confirmed the sale saying the group last year resolved to dispose non-core businesses.
He said: “We made a decision last year to dispose of all non-core investments and focus on our core business.”
Apart from its shareholding in Starafrica, the group has significant shareholding in PG Industries Zimbabwe and PG Botswana. But market sources say the sell off could have been necessitated by the need to raise capital for one of the group’s regional operations.
Stockbrokers believe ABC will be coming to the market with the rest of the StarAfrica parcel.
Chidawo has significant shareholding in Pelhams, Zimplow, BNC and its parent company, Mwanafrica Plc.
Starafrica is a holding company of firms primarily involved in the refining, packaging and marketing of sugar and the manufacture of specified sugar based products, wholesale, bulk haulage, engineering and tyre retreading.
In their financial result for the interim period ending September 30 2009, the group said challenging economic conditions had continued to exert pressure on the company’s margins and volumes, leading to a net loss of US$1,1 million during the period under review. Analysts said the group’s performance was below expectation with a turnover for the period of US$54 million.
Starafrica attributed the loss to an interest bill of US$1,1 million incurred during the six months due to high interest rates on short-term borrowings.
The group indicated that the food business contributed 45% to the group turnover and 283% to the operating loss before depreciation, interest and tax.
“The performance of this business was adversely affected by intermittent supply of raw sugar, water shortages, power outages and funding constraints,” the group said in a statement accompanying their financial results.
The group could not make available figures for sugar production preferring to say that volumes achieved by Goldstar Sugar were marginally below last year’s figures.
There has been a proliferation of different sugar brands on the market and this has seen Starafrica Corporation also re-strategising.