KENYA – KCB Group has placed the loss-making Mumias Sugar Company under receivership following the execution of a lender’s agreement deed dating back to September of 2010.
This is after the miller defaulted on loans amounting to Sh12.5 billion (US$125m) the amount is owed to KCB and other creditors. the bank which features as the primary lender to the struggling sugar miller has in
Subsequently, stalled Mr. Ponangipalli Venkata Ramana Rao from the Tact Consultancy as the substantive receiver manager until the group recovers close to Sh3 billion it lent the miller.
In a move that took the management and workers at the sugar factory by surprise, the bank appointed Mr Ponangipalli Venkata Rao of Tact Consultancy Services as the receiver manager.
Mr Rao visited the factory and served management officials with documents on the latest developments at the miller. He said the intention of taking over the company was to stabilise its operations to recover the money.
“Let us work together and see how best to revive our operations. We intend to run the firm to recoup our money.”
The receiver will immediately take-over the day-to-day running of the Mumias Sugar Company as the firm’s assets are transferred to the statutory management of the newly appointed caretaker.
The latest development has dashed hope of ongoing plans by the Kakamega County government to revive the ailing miller. The entry of the receiver manager is set to jolt plans to turn around the fortunes of the miller.
In the letter, the receiver manager said: “Please note that none of the directors, shareholders, employees nor any other person is authorized to transact any business on behalf of the company without express written consent from the receiver.”
The management of the miller has been asked to submit the statement of company affairs from the date of the appointment of the receiver. They are further required to provide a list of movable and immovable assets (including private and commercial vehicles) together with details of encumbrances.
The also required to submit original deeds of the properties, original logbooks for vehicles and movable assets among other details.
Mumias, which used to be the East African nation’s leading producer at more than 250,000 tonnes a year, has been beset by poor management and mounting losses in recent years.
In the full year to June 2018 it posted a loss before tax of 10.11 billion shillings (US$97.49 million), compared with a loss of 9.53 billion shillings (US$95m) in the same period a year before.