Thursday, November 22, 2012

Mumias Sugar Company - Rights Issue in 2013?

It seems to me that Mumias will need to raise funds for expansion as the COMESA deadline approaches.

The link above from Business Daily Africa is quite eye-opening. The highlights are mine.

"The latest development in the sugar industry is the talk about an impending acquisition of one of the new sugar factories in the Southern Nyanza region by one of the players in the industry.
Initially, I was inclined to dismiss the talk as having no substance. But I changed my mind after I found out that Office of the Commissioner for Monopolies had actually dispatched its officers in the field to study the implications of the impending acquisition and to investigate whether it was likely to lead to over concentration of economic power in the sugar industry by one player."
  1. "New" sugar factory threw me off but it has been rumored for a long time that Mumias wants to take over the sugarcane fields of the inefficient (or dying) government owned competitors.
  2. The acquisition, even if not approved yet, seems to be gathering steam if the Commish is sending folks out there.
  3. Mumias is the largest sugar firm in Kenya & would only grow larger (volumes) if it acquires a local rival.
I figure that once the approvals are in place, the Rights Issue will be planned but likely to happen AFTER the elections are concluded & a new president is in place.