UBA Bank on August 17 appointed PwC’s Muniu Thoithi and George Weru to manage the cement maker in an effort to recover debt.
Mr Thoithi told the Business Daily that creditors with claims amounting to 99.9 per cent of the value of ARM’s outstanding obligations approved PwC’s proposals.
The company is currently producing cement at an estimated 30 per cent capacity in Kenya and 25 per cent in Tanzania, indicating that it is still making losses on the sub-optimal output levels.
Creditors of ARM Cement #ticker:ARM on Tuesday voted to give the company’s administrators PricewaterhouseCoopers (PwC) up to September 2019 to implement several options of resolving its debt including selling assets and disposing of the entire company.
UBA Bank, which had provided the ARM with a Sh500 million short-term loan, on August 17 appointed PwC’s Muniu Thoithi and George Weru to manage the cement maker in an effort to recover the debt.
Mr Thoithi told the Business Daily that creditors with claims amounting to 99.9 per cent of the value of ARM’s outstanding obligations approved PwC’s proposals.
“We got overwhelming support from the creditors who approved our proposals,” he said.
“We are looking at various options including getting strategic investors, selling assets and the whole company.”
Mr Thoithi added that the PwC would in the short term seek a bridge loan from ARM’s existing secured lenders and other parties to maintain cement production.
The company is currently producing cement at an estimated 30 per cent capacity in Kenya and 25 per cent in Tanzania, indicating that it is still making losses on the sub-optimal output levels.
If the Nairobi Securities Exchange-listed firm’s woes will not have been resolved by September 2019 – a year after going into administration — PwC will need court approval to extend its mandate.
At Tuesday’s meeting, creditors controlling at least 75 per cent of ARM’s debt were voting to decide the cement manufacturer’s future.
Some of the influential creditors represented at the meeting were African Finance Corporation, which provided the ARM with a loan of Sh4.6 billion and Stanbic Bank (Sh3.2 billion), with the two institutions holding 36 per cent of the cement maker’s total outstanding liabilities of Sh21.7 billion as of June.
Getting a strategic investor to buy ARM is likely to be a tall order, with several suitors having walked away in a recent attempt to sell the cement maker. It remains to be seen if ARM’s suspension from the NSE will be lifted next Monday as earlier scheduled.
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