Rights issue and rescheduling of debts planned in Mumias turnaround
What you need to know:
Saying there are people who do not want Mumias Sugar Company to be revived so that they can blame it on the Jubilee Government, the Deputy President asked the legislators from Western region to join hands and shame the pessimists.
The Government has released Sh1 billion towards the revitalization of Mumias Sugar Company.
Speaking at State House, Nairobi on Monday during a meeting with members of parliament from Western region, President Uhuru Kenyatta said the revival of Mumias Sugar Company should not be politicised.
The meeting discussed a four-point turn-around strategy for Mumias Sugar Company that includes appointment of a professional management team, injection of funds based on a viable plan, undertaking a rights issue to raise between Sh3 and 4 billion, and rescheduling of debts the company owes financial institutions.
President Kenyatta said the release of funds for the recovery of the key sugar company is based on the Government’s commitment to support cane farmers but not politics.
“We are keen on reviving the sugar company because we know it will benefit farmers. We strongly believe that it will support the economy of Western region. This has nothing to do with politics,” President Kenyatta said.
President Kenyatta expressed optimism that the funds will help to turn around Mumias Sugar Company into a profit making venture that will not only benefit cane farmers but also boost the economy of the Western region.
Deputy President William Ruto said Mumias Sugar Company has the capacity to operate at a profit if it is managed professionally.
BLAME IT ON JUBILEE
Saying there are people who do not want Mumias Sugar Company to be revived so that they can blame it on the Jubilee Government, the Deputy President asked the legislators from Western region to join hands and shame the pessimists.
Speaking at the meeting, the Western Parliament Caucus led by their Chairman, Nambale MP Sakwa Bunyasi thanked the President and the Deputy President for facilitating the release of the Sh1 billion to finance recovery of Mumias Sugar Company.
The members of parliament strongly recommended that those who owe Mumias Sugar Company must be pursued and made to pay promptly as part of the measures to buttress the company.
The legislators said their Parliamentary caucus – which is bipartisan –is working with the Government in ensuring the development of the region.
Over the last three year, Mumias Sugar Company has been not performing well. Between 2013 and 2014, the company registered loses running to billions of shillings. Towards the end of last year, the company was almost grounding to a halt.
This necessitated the Government to call for an audit to reveal the challenges facing Mumias Sugar Company. Irregularity in management, bloated staff, weak governance structure, exaggeration of transport and input costs, and inefficiency in the production process were cited as some of the problems facing the company.
The meeting – which was also attended by National Treasury Cabinet Secretary Henry Rotich and his Interior counterpart Joseph Nkaissery – also discussed other areas of development in the Western region including infrastructure, health and agriculture sectors.
