KENYA - Debts owed to cane farmers contracted to Mumias Sugar Company will be paid first before the company embarks on renovation.
The company owes farmers Sh600 million and the company's managing director Coutts Otolo said farmers will be given the first priority in payments.
The revelation follows Government’s release of Sh1 billion bailout for the company which was facing a possible closure due to lack of funds to run its operations.
"We are going to pay farmers Sh600 million, we will pay all of them their dues. Part of the balance will be used to buy spare parts to enhance renovation of the machines to enhance maximum crushing cane capacity" said Otolo.
The financial crisis has led to the company fail to pay farmers on time despite the fact they supply the company with the raw material.
Adan Mohamed the acting Agriculture Cabinet Secretary blamed the former management for the financial woes affecting the company.
"Mumias Sugar Company had major issues with its governance making it hard to meet its financial obligations.
We have many options to revive the company and the Government has decided to work with lenders to achieve long term sustainability of the company," said Mohamed.