Mumias Sugar factory. The government has committed to release a Sh1 billion bailout to help Mumias pay farmers for their sugarcane deliveries. PHOTO | FILE
Troubled sugar miller Mumias plans to turn to its shareholders for a Sh4 billion cash call to boost its turnaround efforts.
The announcement was made by the office of the Deputy President William Ruto on Friday.
The deputy president brokered a deal between Mumias and its creditors that would also see the miller retrench 300 workers, fire its entire management and replace half its board of directors.
The government has committed to release a Sh1 billion bailout to help Mumias pay farmers who have not received cash for their sugarcane deliveries.
The Treasury has a 20 per cent stake in the Nairobi Securities Exchange-listed miller.
“We have to take these measures so that farmers in the region can be paid for delivery of sugarcane,” Mr Ruto said in a statement.
Audit firm KPMG will be appointed to oversee the company’s restructuring that will pave the way for the rights issue.
Mr Ruto announced the measures after chairing a meeting attended by Treasury PS Kamau Thugge, Mumias chairman Dan Ameyo, chief executive Coutts Otolo and representatives of creditors.
Mr Ruto asked the directors of Mumias to resign for failing the company, noting that they will be forcefully ejected if they refuse to step down.
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