- Kenya’s authorities have announced plans to sell 51 percent stake of five sugar companies in a bid to speed up privitisation process, Agriculture Minister, William Ruto has said.
The news came as a relief for stakeholders as the process has been in limbo since 2007 when it was first scheduled for completion.
Addressing the media at his Kilimo House office on Wednesday, Mr Ruto said the government plans to sell stake of all its sugar millers to strategic investors yet to be identified by the authorities.
The government aims to sell a 51 percent stake in each of the companies to a strategic investor, while another 30 percent will be sold to local farmers. The remaining 19 percent will be sold in initial public offerings once the profitability of the refineries has been improved.
The government has listed five mills for privatisation by June this year. These include Nzoia, Chemilil, Muhoroni, Miwani and Sony Sugar.
According to the privatisation programme, bidding for pre-qualification will be done next month. The completion of the sale and signing of transaction agreements with successful strategic investors is then expected to be concluded by June 2010.
The strategic investor is expected to bring in new technology, including modern equipment and broaden product base, according to the Minister.
Besides sugar, the reforms are expected to stimulate diversification into ethanol and power generation, among other products.
“The strategic investor must be one with a proven track record who will bring private sector expertise and capital to turn around the industry,” the minister said.
Sugar production in Kenya increased by 7.8 percent to 405,835 metric tons in the nine months through September from 376,624 tons a year earlier. Sugarcane delivered to factories rose to 1.14 million tons from 1 million tons, the Kenya Sugar Board said yesterday.
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