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Kenyan tech tycoon Julius Mwale outbids participants in deal to control Mumias Sugar

The bid puts him ahead of steel tycoon Narendra Raval and Rai Group Chairman Jaswant Rai.

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Kenyan tech tycoon Julius Mwale.

Kenyan tech tycoon Julius Mwale has placed the highest bid of Ksh27.6 billion ($249.31 million) in a leasing tender to control and revive Mumias Sugar over a 15-year period.

The bid puts him ahead of Kenyan businessmen such as steel tycoon Narendra Raval and Rai Group Chairman Jaswant Rai, who both expressed an interest in reviving the financially distressed sugar company.

According to a report, the receiver-manager, Ponangipali Rao, disclosed that Mwale’s bid was the highest from among the eight bidders seeking to take control of the company.

He noted that Devki Group owner Raval offered Ksh8.4 billion ($75.9 million), while Rai offered KSh3.5 billion ($31.61 million). Other bidders included Pandhal Industries with Ksh9.7 billion ($87.62 million) and Kibos Sugar with Ksh8.8 billion ($79.5 million).

After months of work and behind-the-scenes negotiations, the deal will set the winning bidder on course to run the plant and offset financial obligations for 15 years.

The offers received following the tender period will be subjected to technical and financial evaluation to pick the firm to lease Mumias Sugar.

Mumias Sugar, a Kenya-based integrated sugar company founded in 1971, was once the largest sugar manufacturer in Kenya, producing as much as 250,000 metric tonnes of sugar per annum.

In 2012, the company ran into a financial crisis. A forensic audit conducted by the audit firm KPMG revealed procedural and financial irregularities in its books, leading to a loss of millions of dollars.

Following the management’s misappropriation of the company’s books, it was suspended from the Nairobi bourse. Since then, it has continued to struggle despite being bailed out by the Kenyan government in the past.

To revive the sugar producer and protect its assets, Kenya Commercial Bank Group (KCB) placed the company under receivership on Sept. 24, 2019.

The company faces a stiff debt crisis. It owed over Ksh11.6 billion ( $107 million) to its creditors, including Kenya’s National Treasury, the Kenya Sugar Board and NCBA Bank Kenya.

Mwale, the president and CEO of SBA Technologies, a New York-based company founded in 2003, has unveiled his strategy to revive the sugar company.

The businessman is also the lead investor in Mwale Medical and Technology City (MMTC), a $2-billion community-owned sustainable metropolis with an extensive medical and technology complex located in Butere Sub-County Kakamega, Kenya.

MMTC also contains a shopping and residential complex, a golf resort and a convention center.

East Africa

Kenyan multimillionaire banker James Mwangi loses nearly $5 million in 56 days as Equity Group shares retreat from 21-month high

Equity Group Holdings Limited is a leading financial services holding based in Nairobi.

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Kenyan multimillionaire banker James Mwangi.

Kenyan multimillionaire businessman James Mwangi has seen the market value of his stake in Equity Group Holdings decline by Ksh550 million ($4.96 million) in the past 56 days, as shares in the Kenya-based group retreated from a record 21-month high.

Equity Group Holdings Limited is a leading financial services holding headquartered in Nairobi, the capital and largest city of Kenya.

Under the leadership of Mwangi, the holding has grown into one of the largest financial services groups in East Africa, operating through its subsidiaries in Uganda, Tanzania, South Sudan, Rwanda and the Democratic Republic of Congo, in addition to its Kenyan operations.

As of press time, Oct. 22, shares in the Kenya-based financial services group were trading at KSh49.95 ($0.451) per share, 91-basis points higher than its opening price this morning.

In recent times, Equity Group has lost nearly eight percent of its market capitalization on the Nairobi bourse, as investors book profits after the share price surged to a record 21-month high of Ksh54.25 ($0.489) on Aug. 27.

Since Aug. 27, the group’s share price has declined from a price of Ksh54.25 ($0.489) to KSh49.95 ($0.451) as of the time of writing, accruing a loss of 7.5-percent for shareholders and insiders, such as Mwangi, who hold stakes in the financial services group.

As a result of the decline in the group’s share price, the market value of Mwangi’s stake has declined from Ksh6.93 billion ($62.55 million) to Ksh6.38 billion ($57.6 billion) between Aug. 27 and Oct. 22.

This translates to a loss of Ksh550 million ($4.96 million) for the multimillionaire banker in 56 days.

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East Africa

Kenyan mogul Julius Mwale offers $20 million to farmers to restore activity at Mumias Sugar

The funds will be used to kickstart sugarcane cultivation and sugar production.

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Kenyan mogul Julius Mwale.

Kenyan tech tycoon and Mwale Medical and Technology City (MMTC) owner Julius Mwale has offered Ksh2.2 billion ($20 million) to farmers in an effort to restore sugarcane farming.

According to recent reports, Mwale said the funds will be used to provide farmers with capital to kickstart sugarcane cultivation and sugar production, and to boost the industry at large.

The capital commitment follows his successful Ksh27.6-billion ($249.31 million) bid made through his Tumaz & Tumaz Enterprise as part of a leasing tender to take control of Mumias Sugar over a 15-year period.

Mwale, who received a $200-million (Sh22.1 billion) loan commitment from a leading U.S. bank to strengthen his chances of taking home the lease, placed the highest bid from among eight bidders looking to assume control of the company, according to the receiver-manager, Ponangipali Rao.

His $249.31-million bid was higher than the Ksh8.4 billion ($75.9 million) that Devki Group owner Narendra Raval offered to take control of Mumias and the KSh3.5 billion ($31.61 million) that Kenyan businessman Jaswant Rai offered through his company, Rai Group.

Mwale’s $20-million commitment is expected to go to farmers who abandoned the Mumias plantation after the sugar-production company ran into a financial crisis three years ago.

In addition, Mwale disclosed that a sum of KSh2.2 billion ($20 million), Ksh887 million ($8 million) and Ksh221 million ($2 million) will be allocated, respectively, to revive two ethanol plants owned by the company, its power generation unit and its water-bottling plant.

Mwale also plans to allocate Sh2.2 billion ($20 million) each to build an airport, an agricultural research university, a sugar tourist resort, a housing project and a hospital at the Mumias complex.

Mwale is the president and CEO of SBA Technologies, a New York-based company founded in 2003.

He is also the lead investor in MMTC, a $2-billion community-owned sustainable metropolis with an extensive medical and technology complex that contains a shopping and residential unit, a golf resort and a convention center.

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East Africa

Ethiopian billionaire Mohammed Al-Amoudi gains $360 million in 21 days after losing $530 million between July and September

His $7.2-billion fortune is derived from closely held companies such as Preem, Svenska Petroleum and Midroc Europe.

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Ethiopian billionaire Mohammed Al-Amoudi.

Ethiopia-born billionaire Mohammed Al-Amoudi has recorded a $360-million boost in his net worth in the past 21 days after his wealth fell by $530 million between July and September.

The billionaire, whose real-time fortune of $7.2 billion is derived from closely held companies such as Svenska Petroleum, Midroc Europe (a construction and property group) and Preem (his most valuable asset), has seen his net worth increase by 5.26 percent since Sept. 29.

Data retrieved from the Bloomberg Billionaires Index revealed that his net worth has increased from $6.84 billion on Sept. 29 to $7.20 as of the time of writing, Oct. 21, owing to an increase in the valuation of his assets across Sweden, Saudi Arabia and Ethiopia.

This translates to a net worth gain of $360 million for the billionaire in the past 21 days.

Between July 28 and Sept. 29, his net worth fell from a valuation of $7.37 billion to $6.84 billion.

The recent increase in his net worth is linked to a revaluation of his equity interest in companies, and specifically his ownership interest in Svenska and Preem, the largest fuel company in Sweden, with an annual refining capacity of more than 18 million cubic meters of crude oil.

Recently, Pyrocell, a Preem subsidiary, announced that a biofuel plant producing pyrolysis is under way. This is in line with the group’s commitment to achieving large-scale renewables production.

The plant, which is located in Gavle, Sweden, will produce around 25,000 tonnes of non-fossil pyrolysis per year, which equates to the annual fuel consumption of 15,000 passenger vehicles.

Al-Amoudi’s net worth of $7.20 billion makes him the 387th richest man in the world behind U.S. businessman and investor Tom Gores, who is $20-million richer.

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