TRUSTEE

KCB places Mumias under receivership

KCB Bank has 1.72 per cent shares while government has 20 per cent stake

In Summary

• On Tuesday, Mumias' shares closed at Sh0.27, having dropped by 3.57 per cent from the previous day, holding a net worth of Sh305.10 million.

Mumias Sugar Company Limited./file
Mumias Sugar Company Limited./file

KCB has announced plans to place the troubled miller Mumias Sugar Limited under receivership.

The bank has appointed PVR Rao (Tact Consultancy Services) as the sugar company’s receiver manager.

Rao has been acting as the appointed receiver and manager of the KCB long-term debt charged against the firms'assets.

The powers conferred to oversee KCB debentures by Rao followed after an agreement by other lenders through Inter Lender Agreement on September 2010.

“KCB Bank Kenya Limited can confirm that Mumias Sugar Limited has been placed under receivership to protect its assets and to the best extent maintain its operations,” KCB said in a statement on Tuesday.

Mumias is partly owned by government under the National Treasury, with 20 per cent stake and serves as the largest shareholder corporation among other 10 companies.

KCB Bank has 1.72 per cent shares, Jubilee Insurance at 1.46 per cent and two Standard Chartered Nominees Limited accounts at 1.4 per cent.

Individual shareholders hold 71.35 per cent of the Nairobi Securities Exchange-listed firm.

The sugar miller firm has been facing liquidation problems over years, and has relied on government support to restructure the liabilities.

In January 2018, Ecobank Kenya, KCB and Commercial Bank of Africa demanded to be paid debts amounting to Sh1.7 billion, Sh480.1 million and Sh364.5 million loans respectively from the insolvent company.

Other lenders including French investment fund, Proparco owed them over Sh9 billion.

The listed firm has also failed to release its financial results for two consecutive years, keeping shareholders and investors in the dark despite being granted an extension by the capital markets regulator.

The last financial results were released in November 2017 for the year ending June 2016, recording a net loss of Sh4.73 billion and revenue of Sh6.29 billion.

On Tuesday, Mumias' shares closed at Sh0.27, having dropped by 3.57 per cent from the previous day, holding a net worth of Sh305.10 million.