Ailing Mumias Sugar Company is in talks with the government to help revive it in a Sh3.14 billion bail it out package.
Taxpayers to cough over Sh3 billion to bail out ailing sugar company
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The sugar miller will receive the cash in three phases, with the first batch expected to be wired by the end of next month on completion of the factory’s ongoing maintenance.
The bailout proposal was reached after a meeting between Mumias East MP Benjamin Washiali and the company’s board on Monday.
“The negotiations are in the final stages. The plan is to release the money in three phases in the ongoing efforts to turn around the fortunes of the miller,” said Mr Washiali.
Mumias has for a while been faced with financial hurdles despite receiving Sh3.1 billion from the Treasury in the last two years.
The first bunch was delivered in 2014 by President Uhuru with the second tranche delivered between June 2015 and July 2016 to settle farmers’ dues and revive machinery.
However, despite the financial aid there was no positive turnaround as the firm reported a half-year net loss of Sh2.92 billion in the period to December 2016.
Mumias Chairman Kennedy Mulwa said that the company is in search of a new CEO to replace Errol Johnston who quit recently.
“Our plan it to recruit a CEO who will be able to win back the confidence of farmers and ensure we have adequate raw material in the catchment to sustain our operations,” said Mr Mulwa.
He also denied reports that the company is out of business claiming that it’s on a “Normal Out Of Crop Closure.”
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