Mumias Sugar receives another Sh1.1bn in bailout plan

Mumias Sugar Company Board Chairman Dan Ameyo during a past AGM. He has revealed that the troubled miller has received a further Sh1.1 million from the National Treasury for its bailout plan. FILE PHOTO | TONNY OMONDI | NATION MEDIA GROUP

What you need to know:

  • Board Chairman Dan Ameyo said the cash will be used in the ongoing restructuring of the firm.
  • He said the funds will be spent on the purchase of factory spares in preparation for the planned rehabilitation of the sugar factory.
  • Mr Wesechere said farmers were excited by the commitment shown by the government to get the miller back to profitability.
  • He said the government should act on allegations of corrupt dealings involving former managers of the company.

The Mumias Sugar Company board has announced that the National Treasury has released the second bailout tranche of Sh1.1 billion to the miller.

Board Chairman Dan Ameyo said the cash would be used in the ongoing restructuring of the firm.

This brings to Sh2 billion the total amount of cash the miller has received from the Treasury.

“We have put in place a spending plan approved by the board of directors and shared with stakeholders in the restructuring of the company,” said Mr Ameyo in a press statement.

He said the funds would be spent to buy factory spare parts in preparation for its planned rehabilitation.

The bailout money will be used to settle outstanding debts to farmers and a staff rationalisation programme that is in place.

Mr Ameyo said despite challenges the miller has faced during the difficult recovery path, suppliers and creditors had continued to give unrelenting support to the management team, led by the Chief Executive Errol Johnston.

THANKED STAKEHOLDERS

“To our esteemed suppliers and service providers including cane farmers, cane transporters, and other creditors, we thank you for patience and continued goodwill that has enabled the company to stay on track despite challenges so far faced along a difficult recovery path,” said Mr Ameyo.

Simeon Wesechere, the deputy secretary of the Kenya National Federation of Sugarcane Farmers, said farmers were excited by the commitment shown by the government to get the miller back to profitability.

“We are currently encouraging farmers to embrace large-scale sugarcane farming to be able to improve their earnings,” said Mr Wesechere.

He said the government should act on allegations of corrupt dealings involving former managers of the company to ensure efforts being made to revive the miller succeed.

“We are concerned about the cartels which are regrouping and trying to frustrate efforts being made by the new management team to streamline operations at the company,” said Mr Wesechere.