Business
The company debts with a range of creditors, including local commercial banks.
The Tanzanian unit of Kenya’s ARM Cement has been sold to China’s Huaxin Cement company, its administrator PricewaterhouseCoopers and Huaxin said yesterday, paving way for completion of one of its production plant. Huaxin would inject $116 million (Sh12.2 billion) into the unit, Maweni Limestone Ltd, to settle liabilities and another $30 million (Sh3.1 billion) to complete plant construction and upgrade, according to their joint statement. ARM Cement was put under administration in August 2018 by some of its creditors over a $190 million (Sh20.1 billion) debt and its shares were suspended from the Nairobi bourse. It had debts with a range of creditors, including local commercial banks. “Securing a suitable investor with the ability to make the requisite investments and inject much-needed capital to boost Maweni’s operations … was a top priority … given Maweni’s dire financial situation,” said Muniu Thoiti, one of the PWC administrators. In October 2018, the creditors approved a proposal by the joint administrators to identify strategic or financial investors in ARM with a view to achieving either a recapitalisation of the company through an injection of equity or a sale of all or some of its assets. ARM Cement had an installed annual production capacity at its two plants in Kenya of 1 million tonnes, while in Tanzania, ARM has a 1.6 million tonnes in annual production capacity at two plants of equal size. Another plant in Rwanda produces 100,000 tonnes a year. ARM Cement slid into losses after investing heavily in its Tanzanian business in 2014 without generating a return. Huaxin has more than 200 plants with an annual production capacity of 100 million tonnes of cement. It also produces aggregates and concrete. The company, which has revenues of $4.5 billion (Sh477 billion), also said it is about to complete greenfield cement plants in Uzbekistan and Nepal. ARM’s Kenya operations were sold to another Kenyan company, National Cement, for $50 million (Sh5.3 billion) last year. The acquisition put National Cement, maker of Simba brand and subsidiary of Devki Group, in line to become the second largest in Kenya. “This transaction is in line with National Cement’s growth strategy in Kenya to position itself as the leading cement manufacturer in the region,” said National Cement Chairman Narendra Raval. From inception in 2010, National Cement has reported strong growth and established itself as […]