Kenyan sugar manufacturer Mumias in receivership
Faced with overproduction and falling world prices, Kenyan sugar producer Mumias Sugar was placed in receivership on 24 March by KCB Bank, following the signing of a lender agreement in September 2010.
Receivership, a traditional procedure under English law, is a form of guarantee enforcement that allows creditors who have not been paid on time to have a receiver-manager appointed by the court. The latter, acting on behalf of the creditor who appointed him, then takes over the operation of the company. In the case of Mumias, the Kenyan banking group, which is the main lender to the company in difficulty, has appointed Mr. Ponangipalli Venkata of Tact Consultancy as the person responsible for managing the receiver. « It is unfortunate that this is happening at a time when we had planned to pay our employees’ salary advances. Management remains focused on resolving the problem as quickly as possible and paying the salary advances as promised, » said John Shiundu, the sugar manufacturer’s human resources manager, quoted in the local media.
In addition, according to the economic daily Business Daily africa, in addition to its commercial debts, the company in difficulty has accumulated a debt of 10 billion shillings (100 million dollars) since 2012 towards the tax authority and the national electricity board. All these financial problems have led to a steep drop in the share price on the Nairobi stock exchange: with a share price divided by more than 10 over the past five years, the company is now valued at less than 500 million shillings ($5 million).
Source: Reuters.
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