The first tranche of Sh2.6 billion was given to the miller between June 2015 and April last year to pay farmers arrears and rehabilitate aging machinery.
As at last month the miller owed farmers Sh900 million.
A forensic audit carried out by financial consultancy KPMG earlier found that there was massive misuse of funds, pilferage and tender manipulation which cost the miller Sh1.1 billion.
Taxpayers will once again shoulder the burden of bailing out the ailing Mumias Sugar Company after the government released more funds for its operations.
The company has been given about Sh240 million from the Treasury as part of the Sh3 billion that it had requested over a period of two years.
The first tranche of Sh2.6 billion was given to the miller between June 2015 and April last year to pay farmers arrears and rehabilitate aging machinery.
“Mumias has received more than Sh200 million as part of government support in the Sh3 billion that they had promised the firm in the form of bailout,” said Solomon Odera, head of the Sugar Directorate.
The money will be balanced between what the troubled miller owes farmers and carrying out annual maintenance of the factory.
As at last month the miller owed farmers Sh900 million.
The miller’s liabilities stood at Sh21 billion as at December 31, a situation that was further worsened by a Sh2.9 billion loss registered by the end of December 2016 — up from Sh1.9 billion in the same period the previous year.
The company has been grappling with an acute shortage of sugarcane, hampering its operations.
This has led to a decline in the volume of cane crushed with the quantity of sugar produced dropping by 67 per cent in the year ending December to 12,197 tonnes from 36,510 the previous year.
The firm was unable to sell electricity to Kenya Power through a power purchase agreement, further affecting its earnings. The Nairobi Securities Exchange listed company has been in financial difficulty due to mismanagement, shortage of sugarcane and cash flow constraints.
A forensic audit carried out by financial consultancy KPMG earlier found that there was massive misuse of funds, pilferage and tender manipulation which cost the miller Sh1.1 billion in illegal sugar imports.
