KENYA – The Mumias Sugar Company board announced that the National Treasury had released of the second bailout tranche of Sh1.1 billion to the miller.
Mumias chairman Dan Ameyo has said the cash will be used in the ongoing restructuring of the firm.
This is the company’s second bailout, bringing to Sh2.1 billion the total amount of cash the NSE-listed miller has received from the Treasury.
“We have put in place a spending plan approved by the board of directors and shared with stakeholders in the restructuring of the company,” said Mr Ameyo in a press statement.
He said the funds will be spent on purchase of factory spares in preparation for the planned rehabilitation of the sugar factory.
The bailout will also be used to settle outstanding payments to farmers and put a staff rationalization programme in place.
The miller is optimistic that despite challenges experienced during the difficult recovery path, its suppliers and creditors will continue to support to the management team led by the chief executive Errol Johnston.
Farmers hopeful of turnaround
Sugarcane farmers said they were hopeful that funds would help the miller get back on the path to profitability.
“We are currently encouraging farmers to embrace large scale sugarcane farming to be able to improve their earnings,” said deputy secretary of the Kenya National Federation of Sugarcane Farmers Mr Simeon Wesechere.
He implored the government to act on allegations of corrupt dealings involving former management officials of the company to further strengthen efforts being made to revive the miller.
“We are concerned about the cartels which are regrouping and trying to frustrate efforts being made by the new management team to streamline operations at the company,” said Mr Wesechere.