The Kenyan assets of the troubled cement maker ARM have reportedly been sold for Ksh. 5 Billion to the National Cement Company. This is a culmination of a process which kicked off when the company was placed under receivership back in August 2018. The company’s shares were suspended from trading on the Nairobi Securities exchange shortly after.
Under the deal, the National Cement will acquire all cement and non-cement assets and business of ARM Cement PLC in Kenya as a going concern. National Cement is a manufacturer and distributor of cement in Kenya and is a subsidiary of the Devki Group with interests spanning steel products, roofing sheets, aviation, and cement. The cement maker has from inception in 2010, reported strong growth and established itself as one of the leading producers of cement in Kenya. The company produces the “Simba Cement” brand.
ARM’s fall from grace came about when they became unable to pay off their loans. ARM Cement had loans with Stanbic Bank Kenya, African Finance Corporation and overdrafts with Barclays, Stanbic, Guaranty Trust and UBA banks. Maweni, its Tanzanian subsidiary, had loans with Eastern and Southern African Trade and Development Bank (PTA Bank), and Development Bank of South Africa and overdrafts with Stanbic and Standard Bank (Mauritius). The financial statements for the year prior to the ARM insolvency noted that the company was not in compliance with financial covenants with AFC, Stanbic, and Aureos.
The transaction, which applies to ARM Cement’s Kenyan assets only, is subject to regulatory approvals, according to the administrators. The administrators are Muniu Thoithi and George Weru from Price Waterhouse Coopers (PwC).
Narendra Raval, Chairman of National Cement, had this to say, “This Transaction is in line with National Cement’s growth strategy in Kenya to position itself as the leading cement manufacturer in the region. The industry is poised for growth and we are excited about the prospects for this next chapter of our business. We will endeavor to safeguard the interests of all stakeholders including the employees, customers, and suppliers in the overall interest of Kenya.”