Companies

Mumias yet to start operation after one year on receivership

mumias

Mumias Sugar Company. FILE PHOTO | NMG

geraldandae

Summary

  • The ailing miller went into receivership last year in September with hopes that the receiver manager would start operations in order to generate some income towards debt repayment.
  • The firm requires half a billion shillings to get back into operations.
  • The funds are to be used in buying worn out spare parts.

Mumias Sugar Company is yet to start milling a year after it was put under receivership in September 2019.

The ailing miller went into receivership last year in September with hopes that the receiver manager would start operations in order to generate some income towards debt repayment.

The firm requires half a billion shillings to get back into operations. The funds are to be used in buying worn out spare parts.

Mumias has been relying on ethanol as the main source of income after other revenue streams such as production of water, cogeneration and sugar production were closed.

KCB has been at the fore front in the receivership programme after other banks shied off when the process took a political twist with opposition from the local leadership.

“It has been a year and we are yet to start milling because of the financial challenges that we are still facing,” said a manager at the firm.

The operations have been slated to resume later this month when spare parts from South Africa are expected to arrive. The sugar firm has not been processing for nearly two years after it sunk into financial woes that saw it default in paying farmers and creditors.

The miller was placed under administration after it defaulted on loans amounting to Sh545 million owed to KCB, which successfully pushed the process through the courts.

Mumias, majority-owned by the government and for a long time Kenya’s largest miller, has been even after the government pumped in about Sh3 billion.

Mumias’ loans stood at Sh12.5 billion at the end of June 2018. It owed Ecobank Kenya (Sh2 billion).