INTERNATIONAL - ARM Cement Ltd. may dispose of some subsidiaries and assets to raise funds as administrators working with the embattled Kenyan company seek to cut debt.
The cement maker, part owned by CDC Group Plc, was placed in administration in August after a search for a strategic investor failed to bear fruit. The company owes creditors more than 12.5 billion shillings ($124 million), and defaulted on a coupon payment for a $10.3 million loan.
“It’s one of the things we must explore once we get approval from creditors to continue operations,” George Weru, an administrator at PwC, said by phone from the capital, Nairobi. “We are exploring a method of finding money to reduce the debt to a sustainable level.”
PwC will hold a creditors meeting on Tuesday, where it will present more proposals on how to keep the company running, Weru said. Those include starting a new search for a strategic partner. There are 11 potential investors who have shown interest in participating in ARM’s recapitalization, according to the administrator.
“We have started a new process,” Weru said, adding that Johannesburg-based Absa Group Ltd. has been appointed as a strategic adviser. Various investors have expressed interest in investing in the company’s business in Kenya and Tanzania, according to the proposals seen by Bloomberg.
PwC is proposing haircuts for ARM’s lenders, depending on how much cash the firm is able to raise, according to the documents. The cement maker’s biggest creditors are the Africa Finance Corporation and Standard Bank Group Ltd.’s Stanbic Bank Kenya Ltd., the documents show. Kenya’s tax agency was due 451 million shillings as of Sept. 4.
ARM’s shares have been suspended from trading on the Nairobi Securities Exchange since the company was placed under administration. PwC estimates that it will take about four months to get a binding offer.