Hard up Mumias to settle S9m debt owed to G4S

Struggling sugar miller Mumias Sugar has agreed to settle a S9 million debt it owes to security firm G4S following out-of-court negotiations the two companies have been holding.

The deal will see G4S withdraw a suit it had filed against Mumias Sugar seeking Sh45 million for accumulated security and courier services it offered to the miller between 2011 and last year.

As part of the deal, Mumias will pay G4S in three installments of Sh16 million, Sh10 million and Sh13 million by November 28. The security firm will only withdraw the suit after acknowledging receipt of the last instalment.

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Under the consent, G4S will also be allowed to attach Mumias Sugar’s assets in the event that the miller defaults on any of the installments.

“Upon payment of the decretal sum in full, G4S’ suit shall be marked as settled. In default of any one instalment, execution will issue,” the agreement filed in court reads.

Terminate contract

The two firms entered into a contract in May 2011, which was to end in July last year, but was extended to last month.

G4S claimed that it was in December last year forced to terminate its contract with the sugar miller owing to the unsettled debt, despite signing on for an extension to January.

G4S’s legal officer says the contract with the company states that Mumias would pay an interest penalty of two per cent in the event that it was late in remitting payments.

G4S had initially demanded Sh40.7 million for guarding services in offices around the country and its factory, Sh4.6 million for response services it offered in times of emergency and Sh173,000 for courier services.

The security firm said in court that Mumias had admitted to owing the amount in emails between November 24 and 27 last year. It added that Mumias Sugar had promised to settle the debt urgently.