The state’s bad loan special purpose vehicle, Zimbabwe Asset Management Corporation Limited (ZAMCO) has emerged with nearly 60 percent shareholding in StarAfricaCorporation after secondary scheme creditors opted to convert a combined debt amounting to $46.85 million into ordinary shares.

In terms of the Secondary Scheme of Arrangement that was approved by shareholders on November 16, 2016, the Creditors were granted rights to convert their debt to equity at any time of option.

Secondary scheme creditors now control 89 percent of the company after the conversion.

“The aforementioned debt to equity conversion will result 4,195,063,188 StarAfrica ordinary shares representing 89% of the post conversion issued share capital of the Company being issued to the concerned creditors and these shares will be introduced for listing on the ZSE before end of April,” said company secretary Jemiston Musemburi in an update.

Upon the conversion, ZAMCO is now the biggest shareholder in the sugar manufacturer at 58.54 percent, followed by the National Social Security Authority (NSSA) at 31.63 percent.

Old Mutual Life Assurance of Zimbabwe and National Railways of Zimbabwe (NRZ) are also among the company’s Top 10 shareholders post conversion.

The principal amount of the debt converted now represents approximately 70 percent of the principal amount of the Secondary Scheme Debt.

“The positive impact of the debt-to-equity conversion will be shown in the company’s financials for the year ended 31 March 2018. The benefits of the conversion will be the reduction of the interest which would have been payable on the principal amount of the Secondary Scheme debt,” Musemburi said.

The impact will, however, be felt from the next He added that the impact thereon will be felt from next financial year going forward, given that the conversion took place at end of financial year.

In October 2016, Zamco agreed to purchase Star Africa’s $32,7 million liabilities in a debt-equity swap arrangement that gave the asset manager about 50 percent control of the sugar manufacturer.

The asset manager was set up by government in 2014 to purchase non-performing loans from banks and clean their balance sheets. It has previously also purchased bad debts from resources group RioZim, apart from those of financial institutions.