The government has leased the Moi University-owned textile company RIVATEX East Africa following a series of losses at the state corporation.
The company was leased to a foreign investor, Arise Integrated Industrial Platforms, due to its debt issues.
After presiding over an on-board ceremony in Eldoret, Trade and Industry Public Services Principal Secretary Juma Mukhwana stated that the company had collapsed despite receiving over Ksh7 billion in funding from the previous regime.
According to Mukhwana, the government has already paid pending employee salaries and will also pay all of the company's liabilities.
He added that ARISE has an agreement with the government to initially employ 118 people, with plans to hire more.
Moi University acquired RIVATEX in 2007, ten years after the facility had closed due to mismanagement.
The university reopened the manufacturing company for research, training and production purposes.
However, according to a recent report by Auditor General Nancy Gachungu, RIVATEX had accumulated losses amounting to Ksh3.04 billion, with debts exceeding Ksh140.92 million.
The company was also facing ongoing operational and financial challenges, including supply chain issues and debt.
Gachungu stated that the company owed Ksh2.13 million in accrued expenses, Ksh56.88 billion to suppliers, and Ksh67.29 million and Ksh4.33 million in retention money.
In response to Gachungu’s report, the company management attributed poor performance primarily to constant breakdowns in processing machines, which hindered the company's ability to supply high-quality goods on time.
“In the circumstances, the company’s continued existence may depend on the goodwill and support from the government, bankers and creditors,” the report stated.
