Top executives to lose jobs as govt offers bailout to Mumias

Corporate News

Add caption

Agriculture, Livestock and Fisheries Cabinet secretary Felix Koskei. He said the company's decline was "largely due to key lapses in management and governance". PHOTO | FILE |  NATION MEDIA GROUP

By GERALD ANDAE, gandae@ke.nationmedia.com

In Summary

• As part of the rescue plan, Sh500 million will be released in the next seven days to enable Mumias meet ongoing overhead costs.
• The ministry is engaging the Kenya Revenue Authority, Kenya Power and others to whom Mumias is heavily indebted to support the bailout.

Top executives at Mumias Sugar Company will lose their jobs, with a management shake-up set as one of the terms for a cash bailout by government.

Agriculture Secretary Felix Koskei says stakeholders have unanimously agreed that new managers are needed to steer the business in different direction.

Moves to replace much of the senior management are underway with the fate of managing director Coutts Otolo remaining unclear.

“Already the company has put up public notices inviting interested applicants (to fill key posts),” said Mr Koskei.

READ: Treasury says no Mumias bailout without shakeup

The minister noted that temporary relief from its debt repayment obligations is critical to getting the company back to profitability.

As part of the rescue plan, Sh500 million will be released in the next seven days to enable Mumias meet ongoing overhead costs. Key creditors are also being lobbied to put on hold any adverse actions.

The ministry is engaging the Kenya Revenue Authority, Kenya Power and others to whom Mumias is heavily indebted to support the bailout.

Mumias owes Sh6.5 billion to a number of banks and began talks last year to reschedule repayments. The firm has asked the Government for Sh2.3 billion to meet its obligations, including paying farmers’ dues.

On Friday, the miller advertised for the positions of chief financial service officer, chief agricultural officer, chief human resource officer and manager risk and compliance, among others.

In June, Mumias dismissed two top managers who had been suspended to allow the company to investigate “questionable sugar sale and importation transactions”.

Mr Koskei said Mumias was locked into unfavourable trading deals and incurring losses due to lapses in management. He said all those who contributed to the firm’s downfall would be held to account.

READ: NSE rises above 5200 points as Mumias rebound continues