Banks queue up first in Mumias Sugar debt resolution

Commercial banks are expected to queue up first as the administrator of the beleaguered Mumias Sugar Company works to resolve the miller’s accrued debts.

On Thursday, the troubled miller’s administrator Kereto Marima asked secured creditors in Mumias to submit their claims before the close of next month.

This ahead of what the administrator describes as the submission of solutions to the settlement of arrears owed by the company to its creditors.

“Any party that considers themselves to be a secured creditor who will not have submitted their claim as well as proof of debt by this date shall be excluded from the benefit of any statement of proposals to be prepared by the administrator during the administration and subsequent distribution,” read a notice by the Mumias administrator.

Later on, the administrator is expected to publish notices, procedures and timelines for submission of claims against Mumias by priority creditors, former employees, trade creditors and farmers who supplied cane.

According to the company’s latest available annual report to June 2018, Mumias had Ksh.12.6 billion in total borrowings.

This to include Ksh.2 billion in arrears to PROPARCO, Ksh.401.4 million to the Commercial Bank of Africa (now NCBA), Ksh.2.1 billion to Ecobank Kenya and Ksh.545.5 million to KCB in addition to Ksh.2.8 billion in bank overdrafts.

In mid-September 2019, KCB Group which represented the group of secured creditors took over the management of the ailing miller and named Ponangipalli Venkata as receiver manager.

All creditors in the miller will be jostling for a share of the miller’s assets should it be liquidated.

In the year to June 2018, Mumias Sugar Company had an asset base of Ksh.15.5 billion with property, plant and equipment valued at Ksh.14.8 billion.

The government has been betting on the leasing of the assets of the firm to return the State-run miller back into vibrancy.