• The firm is privately listed and Oparanya’s declaration does not augur well with shareholders and lenders.
• Ngumbau says Oparanya’s remarks are meant to hurt efforts to revive the company.
Image: HILTON OTENYO
The Mumias Sugar Company (MSC) board has dismissed the purported takeover by the county government of Kakamega as political and inconsequential.
Board chairman Ken Ngumbau yesterday said the MSC is a privately listed company with directors and Governor Wycliffe Oparanya’s declaration does not augur well with shareholders and lenders.
“You cannot just make decisions on issues that have no framework,” he said.
Ngumbau said Oparanya’s claims that the company's directors were planning to sell the property were careless and reckless.
The chairman said most of the company's assets were mortgaged more than 10 years ago by past management and are tied to banks and can therefore not be sold as purported by Oparanya.
“Lenders are very critical in the survival of Mumias and if things were to go the way Oparanya wants, they [banks] will recall their debts and you will find administrators instead,” he told the Star on the phone.
On Friday when speaking to sugarcane farmers in Mumias town, Oparanya declared a takeover of the company by his government “to forestall stripping of its assets by the board of directors”
He said that county enforcement together with police officers will secure the premises to ensure the factory machinery “is not carted away at night”
"We won't allow the directors to dispose of any property, including land, and we are ready to go to court if need be," he said.
But Ngumbau said Oparanya’s remarks were calculated to hurt efforts to revive the company.
“What was said does not make sense not only to shareholders and lenders but also to any strategic partner who is to come in,” he said.
'We had a good meeting with the lenders and President Uhuru Kenyatta, and they are willing to support us until we’re stable again.”
The company has advertised leasing out of its non-core functions such as the water bottling plant, housing estate and the Golf course. It will then concentrate on its core business of milling sugar.
The company stopped milling sugar in April last year because of lack of raw material occasioned by poaching of its crop by rivals. It is producing ethanol alone using bagasse from other millers.
Ngumbau said the company management had met with all stakeholders and agreed on the way forward.
He said sugar millers in the country can only survive if they are freed from their huge debts and change their business model.