NAIROBI, Kenya’s Privatization Commission says it has started engaging with various stakeholders to find an amicable solution which will pave the way for the sale of the five-State owned sugar companies by August next year.
The commission plans to start the tendering process in January next year as it seeks strategic investors to buy a 51 per cent stake in each of the five companies.
The process to privatize the five sugar factories, which began in April 2015, was delayed after after two local leaders moved to court last year to challenge the process. Last week the High Court ruled that the process can go ahead.
This prompted the Privatization Commission to restart the process by engaging stakeholders on how best to sell stakes in the Chemelil, Miwani, Muhoroni, Nzoia and Sony sugar companies.
Tenders for the equity stake sales in the five companies are expected to be issued in January next year with the process to be concluded within eight months.
This will pave the way for strategic investors with financial, technical and operational expertise to come on board in exchange for a 51 per cent stake while the government will hold a 25 per cent stake and farmers are allocated 24 per cent.
In order to protect farmers against exploitation, the proposed 24 per cent stake earmarked for farmers will be ring-fenced by trustees.
As for the combined 59 billion shillings (about 572 million US doillars) debt owned by the five companies, it is envisaged that the injection of private capital in the companies will go a long way towards their rehabilitation and modernization so that the refineries become competitive and sustainable.
Source: NAM NEWS NETWORK