Displaying items by tag: Kenya
EAPCC receives government backing to sell land to meet debts
21 November 2018Kenya: The East Africa Portland Cement Company (EAPCC) has received backing from the Ministry of Trade to sell unused land to pay off debts and commitments of nearly US$150m. The ministry said that a cabinet memorandum is ready to grant the company approval to sell off its assets, according to the Business Daily newspaper. The cement producer says it needs the funds to pay employee benefits, pay suppliers, pay off debts to companies including the Kenya Commercial Bank and the Japanese International Cooperation Agency and refurbish its plant. The cement producer says it wants to spend US$19.5m towards refurbishing its plant in a one-to-two month shutdown. At present the unit is operating at a 50% capacity utilisation rate.
EAPCC described as insolvent by Auditor-General
19 November 2018Kenya: Edward Ouko, the Auditor-General, has described the East Africa Portland Cement Company (EAPCC) as insolvent because it cannot pay its debts. The cement producer made an operating loss of US$34m in its financial year that ended on 30 June 2018, according to the Standard newspaper. Its revenue fell by 25% year-on-year to US$50m. The company said it devised a new strategy to focus distribution on it own depots and to compete on pricing to counteract a lack of distribution of its products in common retail stores.
ARM Cement approach Dangote Cement about potential sale
09 November 2018Kenya: Advisors to ARM Cement have approached Nigeria’s Dangote Cement about a potential sale, according to a source quoted by Reuters. The news follows reporting by Bloomberg that Dangote Cement has expressed an interest in the Kenyan cement producer. Owner Aliko Dangote also said in an interview that his company was in talks with an unnamed company about potential acquisition in Kenya and Tanzania. ARM Cement was placed in administration in August 2018.
Bad loans written off at ARM Cement further devalue company
06 November 2018Kenya/Tanzania: The administrators of ARM Cement have written off loans worth around US$210m to Maweni Limestone, a subsidiary in Tanzania. The decision by the PricewaterhouseCoopers (PWC) administrators has significantly reduced the cement producer’s assets to US$140m from US$362m, according to the Business Daily newspaper. In a report PWC alleges that ARM Cement had treated its debt to Maweni Limestone as a performing loan, despite the fact that the subsidiary had repeatedly defaulted on it, effectively misleading investors as to the value of the company. The write-off has left ARM Cement’s creditors, including the UK government-backed CDC Group, in negative equity to a value of around US$24m.
Other irregularities that have been discovered amount to US$1.5m. These issues include alleged outstanding director pay, payments to mystery customers and a payment of US$0.4m for ‘fixtures and fittings.’
ARM Cement owns an integrated cement plant at Tanga and a grinding plant in Dar es Salaam that is currently not in operation. It is also building a grinding plant in Tanga that remains unfinished. The cement producer was placed into administration in late August 2018.
Kenya: Simon Ole Nkeri, the managing director of East African Portland Cement (EAPC), has been questioned by the National Assembly Trade, Industry and Cooperative committee of the Parliament of Kenya. He told the committee that the company has considered the almost US$14m it owes it workers but he was unable to provide a payment schedule, according to the Business Daily newspaper. In August 2018 the Labour Court allowed the Kenya Chemical and Allied Workers Union to recover the money owed to over 400 workers. In late September 2018 the Court of Appeal gave the EAPC 30 days to make a deposit of the owed funds. However, the cement producer resorted to legal means to delay paying the deposit, as it would ‘cripple’ its business operations.
Kenya: The International Finance Corporation (IFC) says it is still considering investing in ARM Cement after it entered administration in late August 2018. IFC Kenya Country Manager Manuel Moses said that the World Bank institution was waiting for the outcome of the administration process to complete to see if a ‘good proposal’ would emerge, according to the Standard newspaper. Moses made the comments while unveiling the IFC’s investments in Sub-Saharan Africa in 2018.
The Kenya cement producer has been placed into admiration for 12 months to attempt to solve its debt problems. The IFC was previously set to take over loans worth US$120m at ARM Cement in July 2018 and was also interested in an equity stake.
ARM Cement looking for buyer of Kigali Cement plant
24 September 2018Rwanda: Kenya’s ARM Cement is set to auction off its Kigali Cement plant in Nyarugenge District for a second time, following a first attempt. The company forced a legal postponement to the first auction when offers for the unit failed to reach a level it deemed acceptable, according to the New Times newspaper. The only bid it received was for US$113,000 a figure significantly short of the estimate US$1.4m market value of the plant. Kigali Cement operates a 0.1Mt/yr plant.
Kigali Cement plant is being sold in order to pay its creditor, Rwanda Enterprise Investment Company (REIC) in a long running dispute between the companies. ARM Cement owns Kigali Cement but REIC has held shares in it since 2008. ARM Cement acquired a stake in Kigali Cement in 2010 and later took over the management of the company in 2014. Meanwhile, ARM Cement entered administration at home in Kenya in late August 2018.
Mombasa-based clinker trader closed for dust emissions
19 September 2018Kenya: The Mombasa county government has ordered the closure of a clinker storage plant run by Corrugated Sheets due to the accusation that is has emitted large amounts of dust. Stephen Wambua, the head of the National Environment Management Authority (Nema) in Mombasa said that operations at the Mikindani-based unit had been stopped and would not resume until it was in full compliance with environmental regulations, according to the Business Daily newspaper. The closure followed complaints by local residents.
Wambua said that imported clinker via the Port of Mombasa is stored in a number of premises locally. Dust is emitted during loading and offloading of consignments. Nema is also investigating claims that other companies are storing ‘toxic’ materials in the Jomvu area. In August 2018 the Kenya Star newspaper linked the Corrugated Sheets site to widespread respiratory illness in the local neighbourhood, including some suspected fatalities since clinker storage started in 2010.
ARM shares suspended for another 21 days
31 August 2018Kenya: The Capital Markets Authority (CMA) has extended the suspension of ARM Cement’s shares from trading on the Nairobi bourse for a further 21 working days. According to a public notice the shares of the cement maker will remain suspended until 27 September 2018.
“The extension of suspension in trading of the company’s shares takes effect from 30 August 2018 and shall remain in force for a further 21 working days,” said the NSE.
ARM Cement, which is grappling with US$140m of debt, was previously suspended from the bourse for seven working days from starting 20 August 2018.
ARM Cement recovery threatened by loss of mining licences
28 August 2018Kenya: Any potential financial recovery of ARM Cement could be threatened by the loss of its mining licences. Local legislation lists insolvency as a condition that could trigger suspension or revocation of a mining licence, according to the Business Daily newspaper. The cement producer was placed into administration by UBA Bank in mid-August 2018, with PricewaterhouseCoopers staff appointed as administrators. PWC’s Muniu Thoithi said that the company was approaching the government on the issue.