Financially struggling State-run sugar millers are steeped in staggering debts to the tune of Sh90.4 billion, a report prepared by the national sugar task force says.
The amount includes outstanding loans, taxes, penalties and fines due to the government.
The report says the dismal performance of the millers indicated that their long-term lenders, mostly the government, are not protected as the loans were barely serviced.
Top on the list is the collapsed Miwani Sugar that has an outstanding debt amounting to Sh27 billion while Muhoroni Sugar Company owes Sh25.1 billion.
Sony Sugar Company owes the government Sh6.2 billion while Chemelil Sugar’s debt amounts to Sh6.1 billion.
The Mumias Sugar Company, currently under receivership, has an outstanding debt amounting to Sh4.8 billion, excluding taxes, penalties and fines.
The report says: “The companies have for a long time incurred losses resulting in negative returns on investment. Thus, due to the accumulated losses, the companies’ net worth had been systematically eroded to the extent that by June 2018, only Sony Sugar Company had a positive net worth of Sh0.5 billion.”
The other five companies had a deficit shareholders fund, which translates to negative equity.
According to the report, Chemilil had -Sh2.6 billion, Nzoia Sugar Company -Sh37.3 billion, Miwani Sugar Company -Sh22.9 billion; Muhoroni Sugar Company -Sh26.2 billion and Mumias Sugar Company -Sh-14.4 billion.