A picture of Workers carrying packets of sugar at the Mumias Sugar factory in Western Kenya/ The standard
NAIROBI Kenya, Dec 29- Businessman Julius Mwale, who missed out on the offer for leasing troubled Mumias Sugar has protested the move by KCB receiver manager to award the tender to a Ugandan company.
Mwale, who placed the highest bid of Sh27.6 billion on the sugar miller, noted that he will be moving to court to challenge the process claiming a lack of transparency.
The businessman says his company Tumaz and Tumaz was best suited in winning the bid based on the amount that they had placed and the technical expertise that they had tapped from leading consultants in the sugar sector.
“We are moving to court immediately to challenge this process because the receiver manager was not transparent in his evaluation of the bids. I am confident that the court will stop this process given that there is enough evidence to show that the process was flawed,” he stated.
Sarrai Group secured the lease for assets of Mumias Sugar Company and was given the mandate to revive the collapsed sugar milling company, having emerged winners of the bidding process that lasted over four months, according to the receiver manager P V R Rao.
Sarrai Group runs three sugar factories in Uganda.
Additionally, Kruman-Finances has also stepped forward claiming they placed the highest financial bids for leasing Mumias Sugar, protesting the move to award the tender to Sarrai Group, arguing evaluations on technical capacity should have been conducted by a third party.
Kruman-Finances, which was second highest bidder, was gunning for a 25 year-lease with a Sh19.7 billion offer.
The firm, which is associated with French and Turkish investors, had proposed a 15 percent free shareholding to Central and County Government during the restructuring of the company and post-restructuring after 20 years before an Initial Public Offering (IPO).
“The bid evaluation report on technical capacity should be evaluated by a third party other than the Receiver Manager and clear ranking provided, based on actual evaluation facts as per the technical proposal,” said the firm.
Mumias was in September 2019 placed under receivership by KCB Group to protect its assets and maintain its operations.
Its shares were then suspended from the Nairobi bourse, and the leasing deal will be keenly watched by shareholders, including the State with a 20 percent stake, and creditors who are owed over Sh11 billion.
Mumias owes Proparco Sh1.84 billion secured using the electricity generation plant, Ecobank Sh1.77 billion on the ethanol plant, and the Treasury Sh2.83 billion.
On December 14, French development financier Proparco and Pan-African lender Ecobank took hold of Mumias Sugar Company’s prime assets after KCB lost full control of Mumias following a High Court directive ordering the lender to involve other creditors in the operations and planned leasing of the ailing miller.
