Receiver manager hopeful Mumias Sugar will soon roar back to life

Mumias Sugar Company. [File, Standard]

He added: "Kibos Sugar had a lower bid than Sarrai. It offered about Sh18 million a month. There was also Pandhal Industries, which was the lowest-rated of them all. They asked for a moratorium of 18 months and offered Sh28 million from the 19th month, thereby giving a lesser figure below Sh18 million a month on evaluation."

West Kenya offered Sh150 million a month but was disqualified on a competition basis.

"They were going to breach the provision in the Competitions Act which restricts any party to control over 40 per cent of the market, thereby making it a dominant player. Moreover, they did not provide proof of funds," he said.

"They brought a letter from NCBA Bank which was vague and non-committal, stating they (the bank) would consider financing West Kenya in the bid subject to valuation and negotiations."

Without prejudice

He said the letter was also issued on a "without prejudice" basis, which means the bank did not legally bind itself to finance West Kenya.

"It was also in the public domain that West Kenya was having financial issues as they could not meet payment of a decretal sum in a judgment obtained by some former staff who had sued it for wrongful termination," said Rao.

The other firms bidding to run the company but were unsuccessful were Devki Group, who withdrew their bid before the bidding process started, Tumaz who were disqualified because they did not provide the bid bond which was a mandatory pre-requisite, and Trans-mara which failed to provide a bid bond.

Rao regretted that the once vibrant miller is facing unnecessary cases which are hindering its operation.

Lease award

He cited one of them as that of Dubai-based Vartox company which challenged the lease award to Sarrai Group when it had interests only in the company's Ethanol and the Co-gen plant and not the Sugar plant and the Nucleus Estate that Sarrai was mandated to run.

In addition, Rao said that the National Treasury, which has a 20 per cent shareholding in Mumias Sugar Company, the county government of Kakamega and the majority of the seven secured lenders were in favour of the lease to Sarrai and he should be given room to operate freely.

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