This archive report was first published on 5 November 2019.
On November 5, 2019, KCB Group announced the termination of all Mumias Sugar Company employee contracts, effective September 20.
The move affects 732 employees, comprising 433 permanent staff and 319 contracted workers.
According to a statement by KCB's appointed receiver, Ponangipalli Rao, the temporary hiring of new staff is expected to continue until the miller's operations resume.
Mr. Rao emphasized that the new hiring will prioritize past employees.
The layoffs come approximately a month after KCB took over the company's operations on September 20, following the execution of a lender's agreement deed.
Mumias Sugar has been facing financial distress, with a net loss after tax of Ksh.15.1 billion in 2018, up from Ksh.6.8 billion in June 2017.
The company's auditor raised concerns about its continuity, citing an expanded outstrip of current liabilities and current assets to Ksh.21 billion.
Additionally, the firm faced Ksh.12.2 billion in short-term debt maturities of up to 12 months as of June 2018.
Mumias Sugar owes its lenders an estimated Ksh.12.6 billion in outstanding credit, including Eco Bank and the Kenya Sugar Board.
According to a recent report, the miller requires a minimum of Ksh.5 billion to resume operations, with the Kakamega County seeking a strategic investor to provide the necessary working capital.
