ARM Cement administrator seeks asset sale

ARM Cement company premises. [File, Standard]

The administrator of the debt-laden ARM Cement will ask its creditors for support to keep the company running by selling some of its assets to cut debt.

George Weru, a co-administrator for the cement firm, told Reuters the proposals, together with a plan to engage with financiers for working capital, would be put to the company’s creditors on Tuesday when they meet to chart the best way forward.

The company was put into administration in August by some of its creditors and its shares suspended from the Nairobi bourse.

It owes Sh19 billion to a range of creditors, including local commercial banks.

“The level of leverage is significant so what we are seeking to do is to get approval to run a transaction process aimed at disposing of a subsidiary or certain assets to bring cash to reduce the debt,” Mr Weru said.

“In the meantime we recommend that operations are continued and therefore we are also seeking permission to engage financiers for capital.”

He said the company’s production machinery was in need of urgent spare parts while its management needed to be rebuilt after several key staff left due to cash flow problems.