The receiver manager at Mumias Sugar Company - Ponangipalli Ramana Rao - has said that the process to lease out the factory for revival is not yet complete.
A statement signed by company legal officer Patrick Mutuli on behalf of Rao said that the decision to lease Mumias assets to revive the company was reached after initial activities towards the revival faced challenges.
The statement said that the receiver initiated the revival process by starting the distillery operations which faced several challenges relating to shortage of molasses in addition to the exorbitant cost of transporting molasses and bagasse from other factories.
He said that the distillery of ethanol was stopped in March.
“All these events left the receiver with no options other than leasing Mumias assets to revive the operations of the company,” the statement reads.
The statement said that receiver requested for bids for the revival of the company and received eight bids, many of them, which did not pass the test of evaluation, which was based on the technical and financial capabilities of the investor.
“The technical capability was given priority over the financial capability as the most important aspect of the leasing is the revival of the operations and assisting the community by providing the employment,” the statement read.
The statement said that all due process was followed.
The statement said the receiver was aware of the comments about the planned leasing.
Devki group which had shown interest in revival of the company withdrew its bid on Friday citing politics that have surrounded the deal.
Steel tycoon Narendra Raval of the Devki group who had shown interest in the company that stopped milling over two years ago withdrew his bid for the company, a decision seen to be influenced by ongoing politics around the process.
The loss making miller was placed under receivership in September 2019 by the KCB group to protect its assets and maintain its operations.
Leadership in Western is sharply divided over the impending takeover.
While some support the plan, others are suspicious of the deal and want its details made public.
The statement said that the receiver is keen on the revival of the operations of the company to bring back the original glory of the region creating employment opportunities, adding that the receiver has explored all possible solutions for a viable turnaround.
The receiver also started rehabilitation of the nucleus land by funding the ploughing of 677ha and replanting 370ha of the nucleus estate by using own seed cane.
