Troubled cement maker Athi River Mining is set for liquidation in the next five months and eventual delisting from the Nairobi Securities Exchange after more than two years under administration failed to revive its operations.
The EastAfrican has learnt that the transition of the company to liquidation from administration is set to take place on September 30 with the joint administrators becoming joint liquidators to facilitate an orderly winding-up of the affairs of the company and its subsidiaries, in line with the mandate of a liquidator as set out in the Insolvency Act (2015).
The company’s stock was suspended from trading on the NSE indefinitely, effective May 8, 2020.
The joint administrators — George Weru and Muniu Thoithi of PricewaterhouseCoopers (PWC) — revealed in a letter to the creditors dated April 19 that the once largest regional cement maker can’t be salvaged and that it is unlikely that their claims will be settled in full from the proceeds of the ongoing disposal of the firm’s shares to investors.
"Considering that material assets and interests of the company are in the final stages of being disposed and further that, based on realisations, it is unlikely that the creditors of the company will be settled in full, the only available exit option from the administration process is to transition the company into liquidation, the joint administrators said in a letter seen by The EastAfrican.
"The administrators are working towards completing the affairs of the administration of the company by September 30, 2021, to facilitate the transition into liquidation."
According to the administrators, the secured creditors of ARM are estimated to recover between 34 percent and 70 percent while the unsecured creditors are expected to recover between 1.8 percent and 6.5 percent from the sale of the company’s assets (including subsidiary interests).
According to the administrators, the higher recoveries of 70 percent and 6.5 percent would only be achieved if the Tanzanian Revenue Authority tax claim of $22 million in respect to the sale of Maweni Limestone Ltd and the Kenya Revenue Authority tax claim of $4 million in respect to the sale of the Kenyan business to the Devki Group is resolved in favour of ARM.
The proposal for the existing joint administrators to become joint liquidators of the company was approved by the creditors at a meeting held on October 23, 2018.
During the same meeting the creditors also approved the implementation of a robust, competitive and transparent transaction […]