The Privatisation Commission is scouting for a transaction advisor to evaluate five State-owned sugar millers in the latest attempt to sell the loss-making entities in the next 120 days.
The transaction advisor will assess the assets and liabilities of Sony, Chemelil, Nzoia, Muhoroni and Miwani companies and give the current position of their financial status in order to guide the price at which the factories will be sold to strategic investors.
The commission’s chief executive officer Joseph Koskey says the process to sell 51 percent stake to private investors is well on course, expressing optimism that it will be concluded in months.
“We are in the process of recruiting a transaction advisor who will guide us in the process. After that we shall open the bids to interested parties with hope of finalising the deal in the next four months,” said Mr Koskey.
The commission is riding on political good will following the recent deal brokered between former Prime Minister Raila Odinga and the governors from sugarcane growing zones, who had initially opposed the process of selling the factories to private investors.
Initial public offering
Farmers and political leaders in Sony, Nzoia and Chemilil had last year opposed the sale of these factories as they wanted them to be owned by growers through their respective county governments.
The government plans to sell a 51 percent stake in Sony, Chemelil, Nzoia, Muhoroni and Miwani companies to strategic investors and reserve another 24 percent for farmers and employees.
The government will then sell a remaining 25 percent stake in the milling companies in an initial public offering once the factories are profitable.
Mr Koskey says the county governments have been tasked with the responsibility of identifying farmers who will benefit from the 24 percent shares.
Some of the millers are heavily indebted with others like Miwani are under receivership. Mr Koskey says the government will write off the debts to a certain level while the remaining amounts will be converted into equity. Kenya has been seeking more time on sugar safeguards from the Common Market for Eastern and Southern Africa (Comesa) arguing that the country is yet to privatise the state-owned firms, hence asking for protection against cheap regional sugar.