An earthmover parked at the Athi River Mining plant in Kaloleni, Kenya. PHOTO | FILE | NATION MEDIA GROUP Troubled cement maker Athi River Mining (ARM) is seeking to dispose of its Rwanda and South African subsidiaries, bringing closer to de-listing of the Nairobi Securities Exchange (NSE) listed company.
Administrators of the cement processor last year sold its flagship Kenyan business to a family-owned conglomerate, Devki Group, for an estimated $50 million.
Sale of the Tanzanian subsidiary to a Chinese group is also underway.
The disposals are intended to pay off ARM’s $284 million mountain of debts owed to creditors in Kenya ($170 million), Tanzania ($110 million) and Rwanda ($4 million).
The Kenyan market regulator, Capital Markets Authority (CMA), on May 8 extended the trading suspension of its stock on the Nairobi NSE indefinitely, effectively paving way for its delisting once the share sale transactions are concluded.
ARM was put under administration by the United Bank of Africa (UBA) over loan default on August 17, 2018.
It has failed to recover from financial bruises afflicted by mismanagement and tough competition.
The joint administrators procured from PricewaterhouseCoopers(PwC) — George Weru and Muniu Thoithi — said ARM’s Tanzanian subsidiary (Maweni Limestone Ltd) is subject of a sale transaction to Huaxin (Hong Kong) International Holdings Ltd and Huaxin Hong Kong (Tanzania) Investments Ltd as a going concern for $116 million subject to regulatory and contractual conditions.
“There are still a few precedent conditions pending and we continue to engage with relevant stakeholders with a view to fulfilling the same and progressing completion of the transaction at the earliest opportunity,” Mr Weru told The EastAfrican in an interview.
“Proceeds of the transactions will first be used to settle all of the liabilities of Maweni before the balance, if any, is repatriated to Kenya for distribution to the creditors of ARM in accordance to the provisions of the Insolvency Act of 2015,” added Mr Weru.
The administrators are also seeking to resolve a dispute with minority shareholders relating to the firm’s South African subsidiary.The South African business is a dormant entity, according to the administrators.In Rwanda, the administrators are pursuing a potential sale transaction of ARM’s grinding plant — Kigali Cement plant in Nyarugenge District — that is owned by ARM’s subsidiary in Rwanda (Kigali Cement).“The proceeds from the transaction are unlikely to sufficiently cater for all the liabilities of that subsidiary and remain for distribution to ARM creditors,” said Mr Weru.“So, considering Kenya […]