Debt Laden ARM Cement Placed Under the Control of PwC’s

On 17 August 2018, ARM Cement was placed under the administration of PricewaterhouseCoopers (PwC) following an application by the secured lenders. The running of the Company has now been placed in the hands of Muniu Thoithi and George Weru, who have been named the Joint Administrators of the company.

The move is in a bid to allow the company laden with debts to gradually revive its operations and bay creditors from attaching the company’s property. This comes shortly after the ARM’s Chief Executive, Pradeep Paunrana relinquished his role.

According to the Kenyan Insolvency Act 2015, Administration is a proceeding intended to maintain the company as a going concern. The powers of the Board transfer to the Administrator who owes its duties to the company, and to the court. This is in contrast with receivership, where the Administrator owes a duty to creditors.

Mr. Thoiti and Mr. Weru will now control the company’s activities and the assets. This means that ARM will continue its operations in hopes of fully recovering to realize better outcome for its creditors.

ARM Cement is the second largest company publicly traded on the Nairobi Securities Exchange to benefit from the law after Nakumatt Holdings.

According to reports, the Capital Markets Authority was to suspend ARM Cement’s shares from trading beginning August 20.

The company had had a fair share of tale-tell signs predicting its fall. Its shares have fallen from the highs of 90 shillings in 2014 to 5.55 shillings a piece on Friday 17, 2018.

Its 2017 net losses multiplied 2.3 times to 6.5 billion shillings due to the short=term liabilities exceeding the current assets by a whopping 13.4 billion shillings.