Government advertises sale of five sugar factories
28 May 2015, 13:20
Nairobi - The government has advertised the sale of its stake in five sugar factories, following an approval by the Privatisation Commission.
According to the commission’s chairman Henry Obwocha, the sugar factories that will be privatized are Nzoia Sugar in Bungoma County, South Nyanza Sugar in Migori County, Chemelil, Muhoroni, and Miwani Sugar in Kisumu County.
“The proceeds of the sale will fund the rehabilitation and modernization needs of sugar companies,” Obwocha said.
In a notice published on Wednesday, the commission’s chairman said the privatization strategy for each of the company will include the sale of new shares comprising 51 percent of the total shareholding through a competitive process to reputable strategic partners with a proven record of managing profitable sugar companies.
“The rationale behind the proposed privatization is to make the sector more viable and competitive… and mobilization of resources required to modernize the sugar factories,” the notice said.
Also read: House Committee approves privatization of 5 sugar factories
Farmers and employees will get 24 percent ownership through investment trusts formed for the purpose while the government will hold a 25 percent stake.
Obwocha further said that consultations with the county governments, cane farmers and other stakeholders on the privatization will be held within six weeks while the implementation of the sale is expected to take nine to 12 months.
According to the commission, the privatization will create viable sugar companies that are able to access adequate cane at any given season adding the strategy will include write-offs to clear excess debt and conversion of debt to equity in the five millers.
Mumias Sugar is partly owned by the state while private millers in the country are Kibos, Butali, Western Kenya, Sony Sugar, Transmara Sugar and Kwale International Sugar Company.
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