Kenya: Elaborate plans are underway to revive Mumias Sugar Company through mobilisation of funds from shareholders.
This comes even as MPs from western region petition the Government for the Sh1 billion it had promised.
Over 30 MPs under Western Parliamentary Caucus (WPC) who toured the company on Monday were briefed by the management on how they intend to revive the once profit-making miller.
The company plans to raise capital through a shares issue following a recommendation reached last month at an extra-ordinary meeting held in Kisumu.
Mumias, which is in debts of over Sh10 billion has drawn a road map of business and reform activities to be carried out over a period of over five years with the aim of reviving the ailing miller.
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The company is in the process of raising Sh3 billion through a rights issue.
The miller is also in discussion with a number of banks on how to repay a debt of Sh6 billion.
Speaking after touring the company, the MPs led by WPC chairman, Nambale MP John Bunyasi, said they are optimistic that the company will soon bounce back to full operations.
"We have toured the company and we are convinced that in the next three months, the company will be back to normal operations," said Mr Bunyasi.
They asked the board of management to discuss with the company's creditors to give it time before paying debts owed to them.
"The company has undergone a lot of restructuring and we ask the Government to give out the money it promised within weeks so that we can revive the company fully. Creditors should also give the company time to work on few logistics before it starts paying them," he said.
Mumias Managing Director Coutts Otolo said the miller had initiated a number of reforms that will see it get back on its feet.
"Top among the agenda is to raise capital from the rights issue, which we expect the shareholders to buy. We expect to raise Sh4 billion from the same. The price has not been announced yet but will be doing so soon," Mr Otolo explained.
He added: "The funds will then be used to pay farmers' arrears of up to three months, maintenance and other core activities in reviving the company."
repaying period
He further said the company is in discussion with a number of banks to ensure the debts amounting to over Sh6 billion are repaid.
"This may take longer but not more than five years. But before that, we have instituted a number of measures to increase our income especially from our investments including the water plant, ethanol and co-generation as well as laying off a number of staff," he said.
On the water plant, he said the company's sprinkles had increased its capacity and will now be competing with other water brands.
Mumias East MP Benjamin Washiali praised the company's plan to restructure its top management in a bid to inject fresh blood.
"We have been informed that the company has advertised for vacancies to fill the top management positions. We are hopeful that the new managers will do everything possible to turn around the fortunes of the company," said Mr Washiali.
The MP, in whose constituency the company is located revealed that the miller is also targeting to terminate services of some employees to reduce its wage bill.
"Some employees should be terminated because the company cannot sustain the current wage bill yet some of them do not offer essential services," he said.
Over 300 employees whose skills are not required at the moment will be laid off.
