UPDATE ON THE SCHEME OF ARRANGEMENT BETWEEN STARAFRICA AND ITS MEMBERS AND ITS CREDITORS

1.  SCHEME OF ARRANGEMENT
 he Scheme of Arrangement between Starafricacorporation Limited (the Company or Starafrica) and its members and creditors (the T 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 and 7 February 2014, Scheme Members are advised of progress on the Scheme as described below.

2.  DISPOSAL OF ASSETS
 The Scheme prescribes the disposal of Starafricas 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.  Immediately following the sanctioning of the Scheme, the Company received offers for both THB and BSL. Regrettably, these initial offers fell through by 30 November 2013 mainly because the potential buyers failed to raise the funds thereof. Fresh efforts were then made to approach other prospective purchasers, as follows: Blue Star Logistics  Negotiations with a prospective purchaser, which is an entity listed on the Zimbabwe Stock Exchange have been concluded and the Agreements of Sale await signature. The proceeds of the disposal remaining after settlement of the vehicle finance loan and transaction costs shall be deposited into a Trust Account to be managed by our attorneys, Dube, Manikai & Hwacha and used for partly settling creditors in terms of the Scheme of Arrangement on or before 30 April 2014. Tongaat Hullet Botswana  An offer to purchase Starafricas 33.3% shareholding in THB for BWP51.2 million was received from a prospective purchaser listed on the Botswana Stock Exchange and accepted by the Company. The offer is subject to the exercise of pre-emptive rights by the other shareholders in THB and the conclusion of legally binding agreements with the prospective purchaser, which agreements are also subject to regulatory approvals in Botswana and Zimbabwe. As previously advised, a notice of intention to sell Starafricas 33.3% shareholding in THB was given to THB shareholders and was noted by the THB Board on 14 February 2014. A number of meetings have been held with the other THB shareholders regarding the notice of the intention to sell. It is anticipated that any other meetings with the other THB shareholders will be completed before 31 March 2014 and that the disposal will be completed and the proceeds of sale received by 30 April 2014.

3.

PLANT UPGRADE

 Significant progress has been made on the plant upgrade project at Goldstar Sugars Harare (GSSH). Ninety eight percent (98%) of the equipment has been manufactured, of which 94% has been inspected by Societe Generale de Surveillance (SGS), a leading global inspection, verification, testing and certification services provider. The manufacture of the balance of 2% and the inspection thereof by SGS will be completed by 18 March 2014 and shipment will be done on or before 31 March 2014. The equipment is being shipped in 45 containers. To date, 40 containers have been shipped, of which 15 have been delivered at Harare Refinery and 13 are being uplifted from Durban Port. Twelve are on water.  Installation commenced on 3 March 2014, with the structures to hold the equipment now in position. It is projected that the installation programme will take 9 weeks and the upgraded plant is anticipated to be commissioned by 30 April 2014. The new plant and equipment is being installed as it is delivered at GSSH (Harare Refinery).

4.

REFINING OPERATIONS

 Sugar refining operations remain suspended to make way for the ongoing plant upgrade project. It is now projected that refining operations will resume in May 2014 after the new plant has been commissioned.

5. RESTRUCTURING
 All non-core businesses, being Polyfilm Plastics, Highfield Bag, the retail outlets in Gwanda and Hwange, Arthur Garden Engineering and Grant C hemicals have been disposed of in an effort to arrest the haemorrhaging that these businesses were causing on the companys finances and concentrate focus on the core business of sugar refining. Consequent thereof, head count for the Group has reduced significantly. A further reduction in head count will be realised consequent upon the commissioning of the GSSH Refinery as the new process technology is less labour intensive.

6. APPRECIATION
 We express our sincere gratitude to National Social Security Authority (NSSA), one of our major shareholders, whose immense contribution and continued support has made the plant upgrade a reality. We also express our profound gratitude to all Scheme Members for their invaluable support to this Scheme of Arrangement. A plant tour will be organised for interested Scheme Members on or about mid April 2014 when the installation is nearing completion. BY ORDER OF THE BOARD A J Musemburi Company Secretary 13 March 2014 Starafricacorporation Limited 45 Douglas Road Workington Harare Telephone numbers: 662117, 668149, 668902 / 0772 233 136-8 Email address: admin@starafrica.co.zw