Mumias seeks Sh300m from sugar board to pay dues
What you need to know:
- Company chairman Dan Ameyo said the sugar miller resorted to the industry regulator because borrowing from commercial banks was too expensive.
- Mr Ameyo said the firm had suffered severely from cane poaching and illegal sugar imports from Sudan, which drastically eroded its revenues.
Listed miller Mumias Sugar has approached the Kenya Sugar Board for a Sh300 million loan to offset a debt it owes cane farmers.
The payment would help avert a looming strike that threatens to cripple its business.
Company chairman Dan Ameyo said the sugar miller resorted to the industry regulator because borrowing from commercial banks was too expensive and would have led to accumulation of more debt.
“That (commercial banks) was an expensive route that could have seen us incur huge interest rates and more costs,” Mr Ameyo said.
The regulator had earlier extended a Sh500 million loan to the company to finance its business.
FIRM SUFFERED
Mr Ameyo said the firm had suffered severely from cane poaching and illegal sugar imports from Sudan, which drastically eroded its revenues.
The miller has so far paid farmers Sh700 million and promised to clear the remaining Sh300 million dues in the next 10 days.
The company has been restructuring its top brass with a view to improve efficiency and turn around its financial fortunes.
Last week, it announced the suspension of 27 junior and senior managers in its agricultural department, who are alleged to have been involved in malpractices in the course of their duties.
“The exercise is in line with bringing back the image of Mumias and restoring confidence with the farmers,” Mr Ameyo said.
