Athi River Mining is set to sell its non-cement business to Swiss and Mauritian firms.
This in the first large transaction that the company has undertaken since the Pradeep family sold a major stake to UK-based fund, CDC, last year.
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Athi River Mining (ARM), now 40 per cent owned by CDC, Wednesday said it had earlier this week signed an agreement with Omya of Switzerland and Pinner Heights of Mauritius for the sale of its Mavuno Fertilisers, ARM Minerals and Chemicals, and ARM Energy.
This is expected to enable the loss-making ARM to focus on its core business of cement manufacturing. The transaction is subject to shareholder and regulatory approvals.
ARM also said the transaction would take place after completion of transfer of the industrial minerals, fertilisers, mining, and silicates businesses to Mavuno Fertilisers.
“ARM Cement has on September 5, 2017 entered into agreement with Omya (Schweiz) AG of Switzerland and Pinner Heights of Mauritius for the sale of 100 per cent of the shares in Mavuno Fertilisers (a wholly-owned subsidiary of ARM) and its subsidiary, ARM Minerals and Chemicals and ARM Energy, to Omya and Pinner Heights,” said the company in a statement.
“Prior to the completion of this transaction, ARM will transfer its minerals and fertilisers business to Mavuno Fertilisers, its non-cement-related mining business to ARM Minerals and Chemicals, and it silicates business to ARM Energy.”
The company in May this year said it was shopping for a buyer for its non-cement businesses to enable it to raise money for operations.
“In order to remain focused on the cement business, and to raise cash and release a significant amount of working capital locked in Mavuno Fertilisers, the board has decided to exit all of its non-cement businesses,” said the firm.