Dangote has been accused of having a hand in the decision to take over a debt-ridden Kenyan company
ARM, Kenya's second largest cement manufacturer, was placed under administration by UBA Bank
ARM, Kenya's second largest cement manufacturer, was placed under administration by the Nigeria-based lender as it struggled to repay a Sh500 million overdraft borrowed from the lender.
UBA, which led the onslaught, appointed joint administrators from audit firm PricewaterhouseCoopers (PwC) on Friday.
Court filings as well as sources at the company tell of how the bank's strict interpretation of its loan conditions thwarted ARM’s frantic efforts to stay afloat.
This despite UK sovereign fund CDC’s documented promises to inject working capital into the firm.
Aliko's Dangote Cement Plc has a close business relationship with UBA Bank.
The partnership is hinged on UBA's presence in all the 14 countries where Dangote Cement is building plants.
The cement company, which has long held interest in venturing into Kenya, pushed back its entry into the country to 2021 having earlier planned to build a local cement factory this year.
However, UBA Bank Nairobi in a statement on Wednesday said its decision to take over ARM Cement was not influenced by its ties with Dangote.
“This decision was necessitated by the deteriorating financial position of ARM and its fiscal constraints. UBA is a completely independent entity from the Dangote Group. All that exists is a business relationship in the countries of joint presence," the statement from UBA said.
The lender said ARM shareholders failed to keep promises to inject fresh capital into the business, which had defaulted on UBA’s Sh250 million per month repayments.
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