Narendra Raval, chairman, Devki Group of Companies during an interview at his Ruiru office on April 19, 2021. PHOTO | DIANA NGILA | NMG Steel tycoon Narendra Raval plans to invest Sh5 billion in modernising Mumias Sugar #ticker:MSC ageing plant and develop cane in the latest bid to revive the once top miller that stopped production nearly three years ago.
Mr Raval, who is in the race to lease the indebted sugar miller, has unveiled a multi-billion shilling package that will see Sh4 billion used to upgrade the rundown production plant and Sh1 billion sweetener for farmers to return to cane production.
The billionaire who made his initial fortune in the steel industry before moving to cement production is now betting on Kenya’s agriculture sector, with his first step being sugar milling.
Mumias, which used to be Kenya’s leading producer at more than 250,000 tonnes a year, was beset by poor management, heavy debts and years of mounting losses, prompting its closure.
The miller was in September 2019 placed under receivership by KCB Group to protect its assets and maintain its operations.
Its shares were then suspended from the Nairobi bourse, and the leasing deal will be keenly watched by shareholders, including the State with a 20 percent stake, and creditors who are owed over Sh11 billion.
Under the leasing deal, the successful firm will run the plant and pay monthly fees to KCB —which is owed Sh545 million — for up to 15 years.
Entrance to Muias Sugar Company. FILE PHOTO | NMG
Shareholders would wait longer for dividends because the creditors including Ecobank and French development agency Proparco, will first have to recover the defaulted billions.
In an interview with the Business Daily, Mr Raval, who founded steel and cement manufacturer Devki Group, says he will run the plant for between 10 and 15 years if he secures the leasing deal.
"Mumias would require a minimum of Sh4 billion for it to go back to where it was before. I am looking at putting Sh5 billion for it to start running again," said Mr Raval, whose net worth is placed at more than $600 million (Sh65 billion)."I will pay the receiver manager the monthly dues and meet other expenses of running the plant and paying farmers for cane delivery. It is up to the receiver manager to decide on how to divide the money that I will pay them, in terms of paying the creditors," he added.KCB […]