Raysut Acquires Troubled ARM Cement for 10 Billion Shillings

By Isaac Korir / December 5, 2018




Pradeep Paunrana, the billionaire steward of ARM Cement which was put under administration earlier this year has been edged out of the company by Raysut Cement Company through a deal worth 10 billion shillings.

The Oman cement maker’s decision to acquire the company comes timely when ARM’s path to liquidation was imminent. Raysut in a statement said that the acquisition is in a bid to expand its operation into the East African Market.

“The acquisition will complement Raysut’s revised strategy to manufacture clinker in proximity to the markets it supplies to in East Africa,” Raysut said in the statement.

Once the regulatory approval is finalized, it will see the end of Mr. Paunrana’s control of a company founded by his father. ARM went under administration for failing to settle its financial obligations amounting to more than 14 billion shillings. It was also projected that 9.8 billion shillings of the obligations would not be met in the current financial year.

Of the 14 billion shillings total debt, the African Finance Corporation holds a claim of 4.6 billion-shilling convertible debt, whereas 2.5 billion shillings represent an overdraft from Stanbic Bank and 824 million shillings is a loan from Standard Bank Ltd.

Deloitte, an audit firm said in its report that the group incurred a net loss totaling 6.5 billion shillings while the company registered a net loss of 4.2 billion shillings for the year ended December 31, 2017.

“During the same period, the group’s current liabilities exceeded its current assets by 13 billion shillings and accumulated losses had equaled 2.9 billion shillings. The company’s subsidiary, Maweni Limestone Ltd has an outstanding debt of 21 billion shillings and no efforts of its clearance have been made,” said Deloitte.

The company’s acquisition will see Raysut absorb the debt, a move which will attenuate stakes held by major shareholders stake including Mr. Paunrana’s claim.

Currently, Mr. Paunrana who is the managing director of ARM holds 9 percent direct shareholding that amounts to 497 million shillings. Amanat Investments Ltd also holds shares worth 137 million valued at 763 million shillings going by the firm’s last listed share price.

Raysut Cement is part of the Sultanate of Oman that runs operations across the United Arab Emirates.





More Articles From This Author








Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE

ARCHIVES

2018
  • January 2018 (291)
  • February 2018 (220)
  • March 2018 (279)
  • April 2018 (226)
  • May 2018 (240)
  • June 2018 (178)
  • July 2018 (257)
  • August 2018 (250)
  • September 2018 (256)
  • October 2018 (287)
  • November 2018 (286)
  • December 2018 (106)
  • 2017
  • January 2017 (183)
  • February 2017 (195)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (206)
  • July 2017 (190)
  • August 2017 (196)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (167)
  • February 2016 (165)
  • March 2016 (190)
  • April 2016 (143)
  • May 2016 (246)
  • June 2016 (183)
  • July 2016 (271)
  • August 2016 (250)
  • September 2016 (234)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (166)
  • April 2015 (109)
  • May 2015 (117)
  • June 2015 (121)
  • July 2015 (150)
  • August 2015 (157)
  • September 2015 (189)
  • October 2015 (171)
  • November 2015 (174)
  • December 2015 (208)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950