National Cement Company, owned by billionaire businessman Narendra Raval, Wednesday paid Sh5 billion to complete its purchase of ARM Cement assets in Kenya.
The money was paid to ARM’s administrators, PricewaterhouseCoopers (PwC), which was appointed by creditors to run the company after it defaulted on banks and bondholders.
“We have paid $50 million (Sh5 billion) to complete the acquisition of ARM Cement,” said Mr Raval, the chairman and major shareholder of National Cement.
The money was paid through KCB #ticker:KCB which also helped fund the deal. National Cement provided $15 million (Sh1.5 billion) while KCB provided $35 million (Sh3.5 billion). KCB has funded most of the businessman’s deals.
National Cement in May last year signed an agreement to buy the company’s factories, land and mining licences in Kenya but the process was delayed after ARM’s former chief executive Pradeep Paunrana went to court opposing the transaction.
He argued that PwC ignored higher bids, including Sh6.5 billion offered by a consortium which he was part of. The administrator countered, saying that Mr Paunrana’s bid was not backed by proof of funds and was filed outside the offer period. The case was subsequently thrown out, paving the way for National Cement to proceed with the deal.
The payment effectively now places all Kenyan assets of ARM Cement under National Cement, a wholly-owned subsidiary of the Devki Group of companies. Devki was founded by Mr Raval. Besides selling ARM’s Kenyan assets, the administrators are also reviewing bids for the company’s assets in Tanzania.