Nzoia Sugar Company was among the few remaining sugar companies that were really active and sponsoring several teams and also functions. But the recent reports from the Auditor General Nancy Gathungu, Nzoia Sugar Company is technically insolvent after making heavy losses with debts amounting to more than Sh49.7 billion.(courtesy of the star).
Gathungu said that as from 30th june 2019,tha firm had shareholders funda deficits of about 41.5billion and now the liabilities stands at 49.6 billion. The liabilities exceed the current assets of the firm valued at about Sh1.3 billion. And once the liabilities exceeds the value of the company then the company is declared insolvent and the only thing that remains is for it to shut down its operation. Gladys, said the company was therefore technically insolvent and its continued existence as a going concern is dependent upon the financial support from its creditors and the government.The firm is also unable to pay its employees and also the farmers, so the situation is very tough. Nzoia Sugar Company also breached the law by not remitting Sh201.9 million to the Staff Retirement Benefits Scheme Fund. There debt has crippled all the operations of the company, they are seeking for government support so that the company can continue with its operations.
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