Tuesday, August 16, 2022

Controversial billionaire offers Sh. 27.6 billion bid for Mumias Sugar

Mumias Takeover Bids: A controversial billionaire has offered a bid of Sh. 27.6 billion to take over troubled sugar miller Mumias in a lease program. The billionaire who was identified as Julius Mwale gave the highest bid that was over five times higher than the Sh. 5 billion initial bid that had been offered by steel billionaire Narendra Raval. The bid was also higher than the Sh. 3.5 billion bid that had been offered by the Rai family.

Mwale made the bid through his companies Tumaz and Tumaz Enterprises.

Details of the bids also show that Raval had raised his bid by Sh. Sh. 3.5 billion to Sh. Sh. 8.5 billion. This was however still below Mwale’s bid.

Raval withdrew his bid for Mumias in June 2021. He had said that his bid had been castigated by politicians from Western Kenya. He added that his decision was made to protect his business name and reputation from being muddied in politics. Raval’s bid would have seen Sh. 4 billion used to upgrade the rundown production plant and Sh. 1 billion sweetener for farmers to return to cane production.

According to a report that appeared in the Business Daily, Mwale is a former air force engineer. He is financier behind a project dubbed Mwale City that allegedly seeks “to transform Lunza, a sleepy village in Kakamega County, into a ‘Silicon Valley’ worth at least Sh. 200 billion”.

“The viability, financing and progress of the investment have been questioned by many analysts amid court fights over unpaid contractor dues and regulatory approvals for the project,” the report in the daily said. “Mwale, 45, first rose to the public limelight in 2010 while describing himself as the President and Head of Strategy of US-based SBA Technologies Inc.”

The successful bidder will take over Mumias, and pay monthly fees to the Kenya Commercial Bank for up to fifteen years. This payment will be made to offset a Sh. 540 million debt that Mumias owes KCB.

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Additionally, dividends from the company will be used to settle other outstanding debts that are owed to Ecobank and French development agency Proparco. The firm owes Proparco Sh. 1.84 billion secured using the electricity generation plant, Ecobank Sh. 1.77 billion on the ethanol plant. Mumias is also said to owe the National Treasury billions. It also owes commercial banks NCBA and Stanbic Bank a substantial amount of money.

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