Seven bidders tried their luck. These were New Mumias Sugar/Devki Group, West Kenya Sugar, KE International, Kruman Finances, Pandal Industries, Kibos Sugar, and Sarai Group.
What criteria were used to leave out the person who was to clear the debt owed to KCB Group in 12 months and choose one who was to take 10 years?
Who stands to benefit from all this? Of what value does that serve the company?
Was the pain of jobless former employees, unpaid farmers, and shareholders put into consideration?
If you have a loan of 10,000 shillings and approach two people for help, one tells you he can help you clear the loan in 1 day while the other tells you he can help you clear it in 10 days, who are you likely to pick? The person who will help you clear it within the shortest duration. Right?
Mumias Sugar Company has been in dilapidated condition for years now. Upon collapsing, it was put under receivership and in the process, held captive the lives, dreams, and hopes of thousands of employees, farmers, and shareholders.
Despite the fact that mismanagement played a role in killing the once vibrant and roaring sugar factory in Kenya, debts were the major contributing factor. The company was weighed down by debts it owed lenders (such as Kenya Commercial Bank), employees (in salaries), and farmers (who had submitted their cane and never paid.)
With the debts weighing it down, and its economic grave opens just a few meters away, there was an urgent need to find a savior who would heal the ailing factory by clearing the debts owed to lenders, pay farmers, give employees back their jobs and get the company back to the Nairobi Securities Exchange (NSE).
When bidders were invited to submit their bid for the leasing and operating the assets that belong to Mumias Sugar Company, there was a glimmer of hope in many people, not only in Mumias but across the country. Seven bidders tried their luck. These were New Mumias Sugar/Devki Group, West Kenya Sugar, KE International, Kruman Finances, Pandal Industries, Kibos Sugar, and Sarai Group.
The bidders were asked how long it would take for each one of them to clear the debt owed to Mumias Sugar Company to KCB Group, and, therefore, get the factory back on its feet as soon as possible. The New Mumias Sugar/Devki Group said it would take 12 months, West Kenya was said 18 months while KE International said 90 months. At the same time, Pandal Industries said 38 months, Kibos Sugar 130 months, and Sarai Group 124 months.
Now, from the above, who would you have taken just on the basis of how long it would take to clear the debt? The one who would take 12 months or one who would take 124 months? Of course, any sound mind would go for one who would take 12 months. But guess who was picked; the one who would take 124 months.
What does this mean? It means, if the bidder who had committed to clear all the debts owed to KCB Group in 12 months was given the factory, Mumias Sugar would be free of debts in 12 months, shareholders will have their shares back on the NSE in 12 months, farmers will be relieved to start being paid in 12 months, and employees would have their livelihood back, working without the fear of auctioneers showing up at their workplace in the event of a default.
But with 124 months of clearing the debt (10 whole years), it means, Mumias Sugar Company will continue being at the mercy of KCB Group and other creditors for that period. It means shareholders will not be seeing their shares trading back at the NSE and it means, farmers will not be paid in time because the funds will be channeled to paying other debts owed to the “big boys.”
So, what criteria was used to leave out the person who was to clear the debt owed to KCB Group in 12 months and choose one who was to take 10 years? Who stands to benefit from all this? Of what value does that serve the company? Was the pain of jobless former employees, unpaid farmers, and shareholders put into consideration?
Watch out for the next piece at the pain that farmers and former employees of Mumias Sugar Company are going through.