Farmers harvest sugarcane on a farm near Nzoia Sugar Company’s premises
in Bungoma County. The company’s MD Saul Wasilwa admits that it is in a
sorry financial state. FILE
By GERALD ANDAE
In Summary
- Nzoia Sugar Company had liabilities of Sh21bn as at June 2012, exceeding assets of Sh4 billion.
Nzoia Sugar Company is insolvent to the tune of
Sh16 billion, a House Committee was told on Thursday. The Western-Kenya
based sugar miller had liabilities of Sh21 billion as at June 2012,
exceeding the factory’s current assets of Sh4 billion.
The ailing miller’s problems are made worse by the
Sh10.4 billion debt that it owes the government and the Kenya Sugar
Board (KSB) as at June 2012.
“We are not in a position to validate most of the
expenditures and (other) figures due to absence of relevant supporting
documents that have not been submitted to us by the company,” said
auditor-general Edward Ouko during a hearing of the Parliamentary
Investment Committee on Thursday.
The auditor-general said the sugar miller’s
insolvency was a result of inept management and non-performing loans.
The company owes the government a loan of Sh948 million and guarantees
of Sh8.6 billion in addition to Sh840 million owed to KSB.
Chairman on Adan Keynan said the committee would
present a report in Parliament that will recommend the government not to
finance the company if it fails to avail copies of loan documents and
other financial transactions in the coming one week.
“I don’t think Kenyans are ready to fund useless
investments, we will make recommendations that will see the government
stop funding this entity,” said Mr Keynan.
The company’s managing director Saul Wasilwa admitted that the company’s financial position was in a sorry state.
Cheap imports
“Management is in agreement with the auditor’s
observation that in the year under review, this company was in a
precarious financial position,” said Mr Wasilwa.
He said the worrying financial situation at the
firm resulted from accumulated losses, negative working capital and
inability to meet its financial obligation on due dates.
The MD pointed out that the company was trying its
best to cut the losses by ensuring efficiency in milling and
diversifying to other income revenue streams as well as putting in place
an alternative source of power to cut reliance on the national grid.
“We are trying our best to ensure that we remain
economically relevant in future by diversifying our income sources as
well as cutting down on production costs,” he said.
Mr Wasilwa said efforts to operate profitably had
in the recent past been hampered by the low price of sugar locally,
which has been precipitated by the presence of cheap imports.
No comments :
Post a Comment