President Uhuru Kenyatta (right) presents a Sh1 billion bailout cheque to the management of Mumias sugar and leaders of Western Kenya on June 24, 2015. The miller is yet to receive the money. PHOTO | FILE
What you need to know:
Acting Agriculture secretary Adan Mohamed on Monday said that he was not aware that the miller had not received the money.
Mumias requires the funds to finance repairs of its pipes and boilers, which have affected production of sugar.
The Treasury is yet to release the Sh1 billion bailout cash for ailing sugar miller Mumias, nearly two weeks since President Uhuru Kenyatta presented a cheque to the company.
Mumias Sugar Company chairman Dan Ameyo on Monday said the firm urgently requires the money to pay farmers and repair the factory.
“We want the money as urgently as possible to address a number of challenges that we are currently facing,” said Mr Ameyo.
He, however, did not give reasons for the delay in disbursement of the cash, only saying he was not privy to what is happening at the Treasury.
“Honestly, I cannot tell why it has taken long for the funds to be released, I do not have any information regarding that,” he said in an interview.
Acting Agriculture secretary Adan Mohamed told the Business Daily that the funds were supposed to be released shortly after presentation of the cheque. He said he was not aware that the miller had not received the money.
“The funds were to be sent shortly after the President presented the cheque to the miller,” said Mr Mohamed, who is also the Industrialisation secretary.
He said he would follow up on the matter with his Treasury counterpart, Henry Rotich, to find out when the funds would be released.
Mumias requires the funds to finance repairs of its pipes and boilers, which have affected production of sugar.
The Sh1 billion bailout was part of the company’s rescue plan that the government, as an anchor shareholder with a 20 per cent stake, promised to give the miller to facilitate its revival.
President Kenyatta wants Mumias Sugar to prioritise payment of farmers’ dues. The Nairobi Securities Exchange- listed firm owes growers Sh600 million, meaning that the company will only have a balance of Sh400 million to spend on maintenance and other creditors.
It requires an additional Sh4 billion to lift itself out of the financial hole and expects to raise the money through a rights issue.
The Western-Kenya based company owes farmers, banks and other creditors about Sh6 billion.
Mumias Sugar recently hired eight managers as part of the State-prescribed management changes, to replace those who were sacked in a corruption purge last year.
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