Treasury releases another Ksh1 billion to bailout Mumias
Mumias Sugar has received Sh1.1 billion from the National Treasury as part of the bailout deal for the troubled sugar miller.
This takes the total funds pumped into Mumias by government to Sh2 billion after releasing a similar amount back in 2015.
Mumias Chairman Dan Ameyo says the money has come at an opportune time as the company restructures its operations.
“Let me take this opportunity to thank the government for this timely intervention that will help Mumias progress in line with our turnaround strategy,” Mr Ameyo said in a statement
Funds from the second bailout tranche will specifically be used for purchasing new equipment, payment of farmers as well as staff rationalization.
The government is an anchor shareholder of Mumias with a 20 percent stake in the miller. Part of the restructuring plans includes injection of new capital through a rights issue.
Mumias has remained as a loss making entity and is already staring at a Sh2.26 billion half year loss.
Last April, the sugar miller lay off 100 workers after it shut down its water bottling plant and has been looking to cut down on staff number to operate optimally.
The board last year appointed Errol Johnston as its new Managing Director to steer the revival plans.
Mumias requires an estimated Sh4 billion to turnaround its operations.
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