Mumias Sugar Company could grind to a halt in a matter of days unless the government acts fast to inject the much-needed capital to sustain its operations.
A reort in the Nation says the whole of last week, the miller opened only twice as it struggled with faulty mechanical parts that require urgent fixing, which is hampered by lack of funds. For the past couple of months, the factory has experienced numerous stoppages that have seen it operate an average of three days a week. “The company is struggling and we are always on and off . I cannot put the situation any better,” said Managing Director Coutts Otolo.
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When the government, which has a 20 per cent stake in the country’s top sugar miller, agreed to bail out the firm in January, it promised to release Ksh500 million as part of the rescue plan for the company to meet its financial obligations. Three months down the line, the State is yet to release the funds.
Principal Secretary in the Ministry of Agriculture Sicily Kariuki said the funds have been delayed until the miller meets the terms of bailout that were issued by lenders.
Mumias management says it wrote to Treasury two weeks ago informing it that it has met all the terms but the ministry is yet to release the funds. “We are yet to get a response from the Treasury over the matter,” said Mr Otolo.
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