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Mumias receiver manager calls for fresh leasing bids

BUSINESS
By Brian Kisanji | August 4th 2021
Mumias Sugar Company receiver-manager, Ponangipalli Venkata Ramana Rao [Nathan Ochunge, Standard]

Mumias Sugar Company receiver-manager Ponangipalli Venkata Rao has re-advertised a lease deal for the Sh15 billion assets of the debt-ridden sugar firm.

Rao yielded to pressure from stakeholders, including sugarcane farmers and politicians from Western, who demanded a publicly run bidding exercise. 

In an advert published in some of the local dailies on Monday, Rao invited fresh bids in the once giant sugar firm from investors.

Those interested in placing their bids have until August 31 to submit the applications. A similar exercise ran into headwinds in June.

According to the advert, the firm’s assets will be leased out on an ‘as-is-where-is basis with interested parties being allowed to inspect the conditions of the assets prior.

Sugarcane farmers interviewed welcomed the news, saying it will ensure an investor with a capacity to turn around the factory wins the bid.

“Making it public will give many investors a chance to try their luck and ensure the most qualified wins the tender,” said Simon Wesechere, deputy secretary-general of Kenya National Federation of Sugarcane Farmers Association.

According to Wesechere, the development has addressed the legal issues that were triggered by the earlier private bids. Tact Consultancy’s, acting on instructions from the receiver-manager, went ahead to initiate a private lease process of the miller a move that triggered protests from farmers and leaders.

Kakamega Senator Cleophas Malala was among the leaders who opposed the move and demanded the Senate to reject it.

Malala sought to have the receiver make the lease process transparent by including all the stakeholders including sugarcane farmers.

Senate’s Agriculture Committee argued that the process used by the receiver-manager in attempted leasing out of the firm was improper hence directing him to call fresh bids.

Rao, who a month ago appeared before Senate’s Agriculture Committee, was directed to start the bidding process after a false start.

Malala’s and Senate’s demands have been achieved after a notice published in local dailies on Monday where KCB-appointed receiver invited fresh bids from investors, latest by 10 am on August 31.

The receiver who is seeking to recover the debt of his agent KCB said miller’s assets are expected to be leased out on an ‘as-is-where-is basis with interested parties being allowed to inspect the conditions of the assets.

Rao called for bidders to invest in any of its nucleus estate, sugar factory, ethanol plant, mineral water plant, golf course, clubhouse, residential estate among other movable properties.

The leasing is expected to give the miller a new lease of life.

Malala, in his Senate petition, wanted the receiver manager to state the lease time frame.

The advert stated that whoever wins the bid will have to agree with the receiver-manager on the leasing period and monthly lease rent.

In June, businessman and Devki Group of Companies Chairman Narendra Raval withdrew his privately placed bid, citing political interference.

KCB Group placed Mumias sugar under receivership in September of 2019 with the aim of recovering billions of shillings it is owed by the struggling sugar firm.

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