Cement firm secures Sh4.5 billion credit from CfC Stanbic

Kenya: Athi River Mining Cement has secured a Sh4.5 billion credit from CfC Stanbic Bank Limited. This structured facility, which among other things allows for repayments and re-drawing, will complement the cement firm’s other banking facilities by providing added financial flexibility and optimal funding.

The facility was arranged and underwritten by CfC Stanbic’s investment banking arm. “We are very pleased to have finalised this facility,” said Athi River Mining’s MD Pradeep Paunrana (pictured). “Now that our Tanga clinker plant is commissioned, ARM is well on its way to becoming East Africa’s leading cement manufacturer, and part of the reason for this progress is the way we have been able to exploit the increasing sophistication of the financial sector.

Over the last few years, ARM has taken on board among others a corporate bond, an equity-linked note and a convertible bond, with CfC Stanbic being the financing partner. “The ARM transaction once again demonstrates our continuing commitment and ability to support our clients,” said John Ngumi, director, Investment Banking, CfC Stanbic Bank.

He added that such customised financing solutions were increasingly what clients were demanding, especially in sectors such as the cement industry that require large financing amounts, and where conventional banking tools need supplementing with innovative structures.

ARM is boosting its financial muscle at a time when demand for cement in Kenya and the East African region outstrip supply.

Available figures indicate that an estimated $93 billion needs to be spent over the next decade to bridge the infrastructure deficit in Kenya and the East Africa region.

ARM Cement Limited was established in 1974 as a mineral, extraction and processing company. It was listed at the Nairobi Securities Exchange (NSE) in 1997. Its primary business is cement with ancillary businesses in industrial minerals, lime, fertiliser, sodium silicate and special building products. It has a market capitalisation of Sh41 billion.