ARM Cement creditors to get balance payment this month
ARM company's cement plant in Tanga, Tanzania.
Unsecured creditors and traders of the collapsed ARM Cement will this month receive their balance payment from the distribution of proceeds after the liquidation of the listed firm, filings by its administrators PricewaterhouseCoopers (PwC) show.
The unsecured creditors who had laid an aggregate claim of Sh9.97 billion on the firm took the biggest haircut after only recovering 6.78 per cent of this amount---translating to about Sh675.96 million.
A transaction update by PWC showed that about 5.8 per cent of the dividend to unsecured creditors and traders had been settled as of January 25, 2023, with the balance set to be settled this month.
“Unsecured trade and other creditors – 6.78 per cent (of which only the first 5.8 per cent has been distributed so far. With the balance 1 per cent expected to be distributed within the course of February 2023)” PWC revealed.
This means that the unsecured creditors have so far received about Sh578.26 million with the rest of the amount set to be paid out to them this month.
ARM was placed in administration in August 2018 after falling into financial difficulties. The once vibrant cement maker failed to service bank loans as losses piled up and ate into its capital.
Ex-ARM Cement CEO Pradeep Paunrana and Britain’s CDC Group, now known as British International Investment (BII), were the biggest losers in the collapse of the cement maker, having held billions of shillings’ worth of shares at the peak of the firm’s fortunes.
Principal shareholders, including the Paunrana family and UK’s development finance institution (DFI) CDC Group, failed to inject new capital to ease the problem. The creditors opted for a sale of the firm’s assets to raise funds to settle the dues.
The Kenyan assets were sold to National Cement Company, owned by billionaire businessman Narendra Raval for Sh5 billion, while those of the Tanzanian subsidiary known as Maweni Limestone were sold for Sh11.9 billion to Chinese firm Huaxin Cement.
