Uganda-based conglomerate Sarrai Group has secured the lease to operate and revive the ailing sugar miller, Mumias Sugar, for a period of 20 years ahead of Kenyan businessman Julius Mwale and other Kenyan multimillionaires, who offered millions of dollars to win the lease.
Ponangipalli Venkata Ramana, the receiver appointed by KCB Bank, said the lease is in the interest of all stakeholders and in conformity with a recent court ruling dated Nov. 19.
According to the agreement signed by the parties involved in the deal, the operating lease issued to Sarrai Group does not include affiliated ethanol and cogen plants, as the pan-African lender Ecobank and French development financier Proparco have claimed part of the miller’s assets.
Recall that Billionaires.Africa reported that Ecobank hired Harveen Gadhoke as its receiver manager in the forcible takeover of Mumias Sugar’s ethanol plant, while Proparco filed a notice claiming the rights to the sugar miller’s power generation plant.
Sarrai Group, a leading conglomerate of diverse and interrelated agro-manufacturing companies in East and Southern Africa, is a proud owner of several companies in Uganda, Kenya and Malawi.
The Uganda-based conglomerate is led by Kenyan businessman Sarbi Singh Rai, who is the group chairman.
Rai, who is associated with a recent court battle with Jaswant Rai over the distribution of a multimillion-dollar inheritance left behind by their late father, said the group’s immediate focus will be to invest in rehabilitating the machinery back to effective operational status.
He added that the conglomerate will also pump funds to engage outgrowers and an experienced workforce to ensure there is collaboration to revive the factory.
Experts close to the matter revealed that the awarding of the lease to Sarrai Group will be followed by court actions. Mwale, who placed the highest bid of Ksh27.6 billion ($249.31 million) to control and revive Mumias Sugar, threatened to contest in court the award to Sarrai Group.
In a show of interest and commitment to revamping the Kenya-based sugar producer, Mwale offered Ksh2.2 billion ($20 million) to farmers to restore sugarcane farming and jumpstart cultivation and production.
He also revealed plans to allocate KSh2.2 billion ($20 million), Ksh887 million ($8 million) and Ksh221 million ($2 million), respectively, to revive ethanol plants owned by the company, so as to boost operating activities along the industrial value chain.