KCB has appointed a receiver-manager to run the debt-ridden Mumias Sugar Company over default in loans the bank provided to the firm.
KCB appointed PVR Rao as the receiver-manager to run the firm until the funds owed are recovered in full.
Mumias is yet to pay any dividends in 8 years while its share price has been declining trading below Ksh1 at Ksh0.27 as at yesterday putting Mumias market value at Ksh413 million.
On top of that, Mumias has defaulted on loan repayment to its creditors amounting to KSh12.5 billion.
In this case, Mumias owes KCB (KSh 545 million), Ecobank Kenya (KSh2Bn), French Development finance institution Proparco (KSh1.9Bn), Commercial Bank of Africa (KSh401 million), Treasury (KSh3.1Bn), Kenya Sugar Board (KSh1.6Bn), Bank overdraft from various institutions (KSh2.7Bn).
Failed bailout plan
The government, with 20 percent shareholding, had bailed out the firm to the tune of KSh3.5 billion which did little to revive the sugar miller.
In 2017, the KCB bank together with Ecobank and Commercial Bank of Africa loaned about KSh2.6 billion shillings meant to revive operations at the company. Mumias has maintained a downward trend despite the numerous capital injections.
Related:
KRA Freezes Mumias Sugar Accounts, as County Govt seeks to Take Over Management
CMA warns Kakamega County against meddling in Mumias Sugar
