THE Zimbabwe Asset Management Company (Zamco) has taken over Starafricacorporation Limited’s $32 million debt owed to different companies. In 2016, at an extraordinary general meeting, Starafricacorporation’s shareholders approved the conversion of debt to equity as part of restructuring the company’s balance sheet. In an audited financial statement for the year ended March 31, 2018, chairman Mr Joseph Mutizwa said the consolidated loan had tenure of eight years and attracted an interest rate of seven percent payable quarterly. “Zamco assumed debt owed to seven financial institutions by the group as part of the secondary scheme of arrangement. The scheme approved takeover of principal debt amounting to $32,6 million but Zamco managed to finalise principal amounts relating to five institutions whose amounts totalled $31,9 million,” he said. Zamco was elected to exercise its option to convert the cumulative debt as of March 22, 2018, which totalled $34,4 million into 2 760 284 842 ordinary shares at a price of 0,0125 per share. As a result of the conversion, Zamco has assumed controlling shareholder status with 58 percent stake. The asset management company is a special purpose vehicle established by Government in 2014 to buy-out non-performing loans from banks in order to clean their balance sheets. Mr Mutizwa said prior to the conversion, Zamco had sought a waiver from the Zimbabwe Stock Exchange on the requirement to offer to buy out minority shareholders as its shareholding had reached 35 percent call threshold. He said the group’s performance during the period under review was showing a going concern status having reduced the loss after taxation from $5,9 million in 2017 to $3,8 million in 2018 “The state of the balance sheet has improved following the conversion of $46,8 million worth of debt into equity as was provided for under the secondary scheme of arrangement with creditors, which came into effect on February 3, 2017,” he said. The conversion presents 70 percent of the legacy debt, which had the conversion option and resulted in the reversal from a net liability position of $41 million in 2017 to a net asset position of $1 million in the year under review. “The net current liability position reduced from $8,9 million in 2017 to $7,9 million in 2018 and work is in progress to restructure legacy statutory debts, which form part of current liabilities into long-term,” he said. - Chronicle