Operations at Mumias Sugar Company have been halted following Kenya Power’s decision to cut electricity for the sugar miller over Ksh2 billion arrears in electricity bills. The power was disconnected on Saturday evening, following ‘an order from above’.
This is despite a meeting held last month between the two companies, that deliberated how embattled Mumias will pay the bill.
A local daily reports that Mumias was preparing to start producing ethanol on Monday, when Kenya Power threw them off the balance.
“We were set to start processing ethanol production when the electricity supply was switched off. We had already fermented the materials in preparation for the processing but could suffer loses if the matter is not resolved,” said Mumias acting CEO Patrick Chebosi.
The company has been facing financial hardships that has seen lenders threaten to auction its property. Last week, its managers were served with a notice from auctioneers demanding Ksh13.4 million awarded to a former employee Ms Pamela Lutta, who sued for wrongful termination.
The miller owes lenders more than Ksh20 billion (Ksh700 million to farmers), which threatens to bring down for good Mumias.
Early last month, Mumias temporarily stopped crushing of cane due to shortage of raw material.
The miller, however, still faces a hurdle in its plea for additional funds from the Treasury. Mumias board chairman Kennedy Ngumbau Mulwa said a month ago that 80 per cent of the turnaround plan had been approved by the Treasury and progress was being made on the balance.
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