When Mr Bernard Ngugi was appointed the Kenya Power chief executive officer on October 29, 2019, he promised to ensure the company’s business sustainability and make money for the shareholders.
He didn’t. As he might have found out, Kenya Power was in deep trouble.
But 21 months later, Mr Ngugi has either been shown the door – or simply jumped out – as the company continues to sink into financial blackouts, debts and possible collapse.
And in the regular game of musical chairs at the listed company, the board yesterday announced that it had appointed Ms Rosemary Oduor as the acting managing director and chief executive. The statement said that Mr Ngugi "resigned" after working with the company for 32 years.
With the exit of Mr Ngugi, Ms Oduor is inheriting financial turmoil at a company that posted a Sh3 billion loss in the last financial year – despite being a monopoly. It was the first loss in 17 years.
And now, a Cabinet memorandum drawn by the National Treasury has revealed the deep financial mess at the company that paints a picture of an entity on life support.
How the monopoly has fallen from a profitable entity, that raked in more than Sh130 billion in revenues to a loss-making entity that is burning all the cash, has intrigued investigators who are trying to unravel what went wrong. For now, Kenya Power can only survive with a bailout from the taxpayers – and the hard-pressed Treasury is also feeling the burden.
To stay afloat, Kenya Power is depending on overdrafts to pay salaries and finance working capital, as it totters towards bankruptcy. It is seeking the help of Treasury to turn its debts into equity. The Treasury will form a team to restructure the debts.
The Treasury document seen by the Nation reveals that what was once a cash rich parastatal – stripped to the bone by the Kanu regime and rescued by the Mwai Kibaki administration – has consumed all the billions it had in its reserves. Now, it is almost bankrupt and is unable to pay suppliers and lenders and meet obligations of shareholders.
"Kenya Power is facing serious financial challenges and is unable to meet her current obligations to suppliers, lenders and shareholders," the document prepared by Treasury Cabinet Secretary Ukur Yatani advising the Cabinet on what must be done to rescue the company from imminent collapse reads in part.
Power Purchase Agreements While much […]