National Cement Company Limited, a member of the Devki Group Of Companies has entered into an agreement to acquire all cement and non-cement assets and business of ARM Cement PLC for KSh 5.0 Billion.
“ARM Cement PLC (under Administration) announces that National Cement Company Limited has signed an agreement for the acquisition of all cement and non-cement assets and business of ARM Cement PLC in Kenya as a going concern for a purchase price consideration of $50 million,” the firm said in a statement.
Narendra Raval, Chairman of National Cement said the transaction was in line with its growth strategy in Kenya ‘to position itself as the leading cement manufacturer in the region’.
“The industry is poised for growth and we are excited about the prospects and we are excited about the prospects for this next chapter of our business,” he said.
According to a statement by the company’s administrators, PricewaterhouseCoopers (pwc), the transaction, which applies to ARM Cement’s Kenyan assets only, is subject to regulatory approvals.
“We are pleased to announce the signing of this transaction which marks an important moment for the delivery of our mandate as joint Administrators of ARM Cement top realise value for the creditors’ ensure continuity for the business and its suppliers and in the process safeguard the jobs of its employees through ongoing concern sale,” said George Weru, joint Administrator for ARM Cement.
Muniu Thoithi added that they will continue to pursue the transaction process in relation to the other subsidiaries of the Company ongoing concern basis so as to reach the best and most expedient outcome in the circumstance for the Company’s creditors and will communicate with relevant stakeholders as appropriate in due course.”
Absa Bank limited through it’s Barclays Financial Services Limited (Kenya) and Barclays PLC acting through its Investment Bank (Barclays) acted as financial advisers to the company.
Walter Kontos, supported by the Regulatory Compliance & Advisory team at PwC, acted as Legal Advisers to the Administrators.
Bowmans (Coulson Harney LLP) acted as Legal Advisors to National Cement.
ARM Cement and its subsidiaries also have operations in Kenya, Tanzania and Rwanda.
In October 2018, Creditors of the indebted ARM Cement approved the sale of one of its subsidiaries to reduce its debt. 102 creditors, collectively owed KSh9.6 billion approved the proposal with two creditors, together owed Ksh 87,000 rejecting.
ARM Cement was placed under administration in August 2018 to give it an opportunity to recover by keeping away creditors from attaching its property with Muniu Thoiti and George Weru of PwC taking over the management.
Before being placed under administration, the firm in its 2017 Annual Report had indicated that “The Directors have embarked on a financial restructuring plan of the Group which includes equity injection and replacement of the expensive short-term loans with long-term loan facilities.”