This archive report was first published on 9 June 2021.
As of 2018, Mumias Sugar Company Limited had assets worth Sh15.7 billion, while its liabilities stood at Sh30.1 billion, a stark contrast that has left the company insolvent and unable to meet its financial obligations.
The Receiver Manager, Ponangipalli Venkata Ramana Rao, has expressed concerns that selling assets may not be enough to save the milling company, as the proceeds may not be sufficient to settle all its creditors.
According to Rao, the company's move to use initial government funding to finance past management losses without any value addition has further exacerbated the situation.
“Any further funding has a risk due to non-cooperation from other secured lenders and several court cases with a risk of uncertain outcome,” Rao noted in a letter dated June 4, 2021.
As of 30 September 2019, the Kenya Revenue Authority (KRA) had claimed tax arrears of Sh10.35 billion from Mumias, further straining the company's finances.
The receiver has also complained of several failed attempts to vandalise the assets, which he attributes to the cooperation of the county security and police officers in ensuring the safety of the assets.
