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NEWS & CURRENT AFFAIRS

The Nairobian

State gives Mumias Sugar Sh1.1 billion more

News

By Jackline Inyanji | Apr 28, 2016

Mumias Sugar Company (MSC) has received Sh1.1 billion as advance payment for the second bailout from the Government.

This brings to Sh2.1 billion the amount given to the company by the Government for its restructuring plan.

MSC Chairman Dan Ameyo said the funding has come at the right time as the bailout will be used to settle outstanding payments.

“We have put in place a spending plan approved by the board of directors and shared with stakeholders in the restructuring of the company. The funds shall be directed to purchase of factory spares in preparation for factory rehabilitation, farmer’s payments and staff rationalisation,” Mr Ameyo said.

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Last year, the Government released Sh1 billion to the miller and announced a revival strategy that includes undertaking a rights issue to raise between Sh3 and Sh4 billion.

Key role

Wednesday, Ameyo thanked the Government for the timely intervention.

“The local leadership has also played a key role in keeping hope alive within the population while standing by our side. I also thank our esteemed suppliers and service providers and other creditors for your patience and goodwill that has enabled the company to stay on track despite challenges so far faced along a difficult recovery path,” he said.

Over the last three years, the company has struggled financially affecting thousands of farmers who depend on it.

Between 2013 and 2014, Mumias registered losses running into billions of shillings that almost brought the company to a halt.

An audit revealed that irregularity in management, bloated staff, a weak governance structure, exaggeration of transport and input costs, and inefficiency in production processes were some of the issues bogging down the firm.