National Cement Company, owned by billionaire businessman Narendra Raval, paid Sh5 billion to complete its purchase of ARM Cement assets in Kenya yesterday.
According to Business Daily, KCB assisted in paying the money, by contributing KSh3.5 billion of the total amount. The money was paid to ARM’s administrator Price Waterhouse Coopers (PwC).
ARM was suspended from trading at the Nairobi Securities Exchange, and put under administration in August 2018 by some of its creditors. The company had KSh4.6 billion convertible debt owed to the African Finance Corporation, KSh2.5 billion in overdraft facilities owed to Stanbic Bank and KSh824 million owed to Standard Bank Limited.
Therefore National Cement signed an agreement in May 2019 to buy the company’s factories, land and mining licences in Kenya. However, the acquisition process was delayed after ARM’s former chief executive, Pradeep Paunrana, went to court to oppose the transaction.
In September, the court threw out a bid of Ksh6.5 bilion by sugar-billionaire Jaswant Rai and former ARM chief executive and owner Pradeep Paunrana saying the offer was filed outside the offer period.
“It does seem that the applicant’s guarantee is conditional or dependent on a ‘consortium agreement’ whose terms, unknown not only by the respondents but also by this court, is to leave the transaction exposed and vulnerable,” Justice Kasango said then.
The payment effectively now places all Kenyan assets of ARM Cement under National Cement, a wholly-owned subsidiary of the Devki Group of companies. Devki was founded by Mr Raval. Besides selling ARM’s Kenyan assets, the administrators are also reviewing bids for the company’s assets in Tanzania.
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