KENYA – Mumias Sugar Company on Friday starts the search for a new CEO as part of turnaround efforts that will see the board and management of the miller sent home.
The Nairobi bourse-listed firm has advertised top positions that include that of legal affairs manager.
This comes soon after the government announced a Sh5 billion deal with lenders to revive the company that reported a bigger first-half loss for the period to December from a year ago.
The deal will see more than half of the board members sent home and the hiring of a new executive team as well as the retrenchment of about 300 staff.
“He/she will have a critical role of managing the ongoing restructuring process so as to achieve business efficiency and turnaround,” said the advertisement for chief executive.
Mumias Sugar Company in June last year sacked its chief executive officer Peter Kebati and commercial director Paul Murgor after finding them culpable for illegal sugar imports that cost the miller more than Sh1 billion.
Coutts Otolo is the firm’s chief executive and leads a management team that does not have substantive heads of four departments, including human resources, marketing and commercial.
The turnaround plan will involve weeding out “sugar brokers” who have made the price of the commodity from the company uncompetitive.
Audit firm KPMG will be appointed to oversee the restructuring that will see the issuance of a rights issue to inject Sh4 billion into the ailing factory.
The government says it will release Sh1 billion within a week when the audit firm is on the ground. The money will be used to pay farmers’ dues and put the company back on its feet.
Mumias will hold its Extraordinary General Meeting on April 10 to seek shareholders’ support and approval for the rights issue.
The announcement of the bailout came on a day that the sugar company said its loss widened to Sh2.08 billion from a restated Sh407.4 million loss last year.
The firm, whose sugar output accounts for about a third of Kenya’s annual production, said net revenues for the period ending December fell 62 per cent to Sh2.67 billion.
The company said the loss was largely due to an unscheduled and out-of-crop maintenance. The poor performance was also attributed to mismanagement and graft.