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US company tops bids for Mumias lease

BUSINESS
By Nathan Ochunge | October 11th 2021

Mumias Sugar Company gate, May 2021. [Benjamin Sakwa, Standard]

Eight companies have submitted bids to lease Mumias Sugar Company that is under receivership.

The firms are Pandal Industries, KE International (US), West Kenya Sugar, Sarrai Group (Uganda), Krumen Finances, New Mumias Sugar/Devki Group, Kibos Sugar and Fredrick Coombes/ Sucriere Des Mascareigmes Ltd.

Mumias Sugar Company receiver-manager Ponangipalli Rao who supervised the opening of the bids in Nairobi said the US-based firm, KE International topped the list after submitting a bid of Sh27.6 billion for a 20-year lease.

Kruman Finances, associated with French and Turkish investors, was the second-highest bidder offering a bid of Sh19.7 billion for a 25-year lease, followed by Sarai Group (Uganda) that placed a bid of Sh11.5 billion for a 20-year lease.

Pandal Industries placed a bid of Sh9.7 billion while Kibos Sugar Sh8.8 billion and New Mumias Sugar/Devki Group Sh8.4 billion.

The three firms want to lease the troubled sugar miller for 20 years. Before the suspension of the earlier bidding process, Devki Group wanted to inject Sh5 billion into the company but withdrew after protests.

West Kenya Sugar placed a bid of Sh3.5 billion a 20-year lease, while a Mauritius based company Sucrie Des Mascarelgnes Ltd participated in the bidding but did not disclose its bid value.

“What is remaining is to carry out the technical and financial Evaluation of each of the bidders to ascertain whether they can run the sugar miller as per the bids submitted,” said Kakamega Senator Cleophas Malala.

Last year, Rao placed an advert inviting investors to lease the miller but the court stopped the process. Some of the investors who had shown interest were Russia’s Catalysis Group, Sarrai Group (Uganda) Kruman Associates from France, Kibos, Devki Group, Premier JV (India) Third Gate Capital management and Godavari Enterprises India.

In a report dated June 4, 2021, the receiver-manager disclosed that Mumias Sugar has an asset base of Sh15.7 billion and liabilities valued at Sh30.1 billion. 

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