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Kenya’s ARM cement limited placed under administration as authorities try to revive the manufacturing company
The Capital Markets Authority is expected to suspend ARM Cement’s shares from trading when market resumes after weekend on Monday.
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The loss-making firm has been taken over by PricewaterhouseCoopers (PwC) following year-in year-out losses in a move aimed at giving the debt-laden firm a lifeline to recover by keeping away creditors from attaching its property.
Muniu Thoiti and George Weru of PricewaterhouseCoopers (PwC) took over the management of the cement maker on Friday, the audit firm said in a statement.
“The primary objective of administration is to enable an administrator, a licensed insolvency practitioner, to explore the possibility of rescuing the company either as a going concern or for achieving a better outcome for creditors than would likely be the case if the company were liquidated,” PwC said in the statement.
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The Insolvency Act of 2015 gives companies going through financial turmoil an opportunity to put their act together, including settlement of debts, allowing them to continue operating instead being ‘killed’.
ARM, which is publicly traded on the Nairobi Securities Exchange, is the second major company to benefit from the law after cash-strapped retailer Nakumatt Holdings in January.
The cement maker’s net losses in the year ended last December widened 2.3 times to Sh6.5 billion as short-term liabilities exceeded current assets by Sh13.4 billion.
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