AgricultureBusinessEconomyFarmingNews

Mumias Sugar inches closer to getting an investor

Receiver manager Ponangipali Ramana Rao is in the final stages of identifying an investor to lease core and non-core assets of the mill for its revival.

Story Highlights
  • Gakwamba Farmers’ Co-operative Society Limited, one of the shareholders, had filed an application in the High Court seeking orders to prohibit Rao from acting as receiver manager and from advertising to lease its assets.

The troubled Mumias Sugar Company could soon get an investor in its revival plan after the High Court okayed the opening of tenders for leasing the mill after about three-year closure.

Receiver manager Ponangipali Ramana Rao is in the final stages of identifying an investor to lease core and non-core assets of the mill for its revival.

The process has been dogged by controversies that delayed the drive to revive the company that went down under heavy debts and inadequate supply of raw materials in 2018.

On Tuesday, Rao invited all bidders for the opening of the tenders for the leasing of the factory on Thursday.

“We confirm that the bid particulars will be announced in the presence of the bidders on Thursday, September 30, 2021, at Trademark Hotel at 10am,” an invitation to bidders by Rao read.

“A maximum of two persons from each bidder is permitted to attend. Please confirm the names of persons attending from your company together with their ID numbers.”

The tender for the leasing of the factory closed on August 31, but could not be opened because of a court order obtained by some of the shareholders.

Gakwamba Farmers’ Co-operative Society Limited, one of the shareholders, had filed an application in the High Court seeking orders to prohibit Rao from acting as receiver manager and from advertising to lease its assets.

But in a ruling delivered on Monday, High Court judge W A Okwany allowed the receiver manager to proceed and open the bids.

“To my mind, the opening of bids, in this case, is not of interest to the specific bidders only but also a matter of national concern, considering the public interest that this case has so far generated,” Okwany ruled.

“I am of the view that the opening of any bids should not be the physical opening of envelopes per se, but should include a transparent declaration or disclosure of the names of the bidders and the nature of their bids. I do not see how such a declaration can prejudice any party to this suit.”

The judge said the court only stopped the evaluation of the bids pending the outcome of the application.

Gakwamba Farmers’ Co-operative Society had also filed a suit in August seeking inclusion in the leasing process. The ruling of the suit will be on October 7.

The leasing process for the company began in June but ran into headwinds after a section of the leadership from the Western region, led by Kakamega Senator Cleophas Malala, protested against opaqueness in the process of identifying an investor.

The Senate Standing Committee on Agriculture, Livestock and Fisheries then summoned Rao on June 9 and directed him to restart the process in a transparent manner.

Rao seeks to lease the nucleus estate, sugar factory, ethanol plant, co-generation plant, mineral water plant, residential estate, guest house, clubhouse, golf course and other movable assets.

The company was placed under receivership in September 2019 by the Kenya Commercial Bank with a view to protecting its assets and reviving its operations.

The receiver opted for leasing after his earlier attempt to revive the mill failed for lack of funds.

The once premier mill in East and Central Africa closed shop about three years ago, following huge debts owed to suppliers and creditors and a shortage of raw material due to the poaching of its contracted cane by rivals.

Earlier attempts by the government to rescue the mill failed, even after it pumped over Sh3.5 billion into its turnaround plan.

Via
Hilton Otenyo
Source
The Star

Related Articles

Back to top button