Athi River Mining Cement (ARM Cement) was in the debt market as from last Thursday in an effort to raise Ksh 10.7 Billion through a privately place five-year bond.The offer which runs until 2nd December will help the firm consolidate its debts.
“The proceeds from the bond will be used to replace existing short term borrowings. There is no increase in total debt only refinancing existing short-term debt,” said Pradeep Paunrana, chief executive of ARM Cement
The NSE listed firm says its debt has tripled in the last 5 years to over Ksh 14.7 Billion and the capital intensive projects will require financing which would cost at least Ksh 26 Billion.
Major highlights from the bond
-The bond will be sold to deep pocketed investors & is BEST suited for investment fund managers.
-The bond will not be listed on the Nairobi Securities Exchange
-The bond will be issued in Kenya Shillings as well as the US dollar and comes in both fixed and floating rates
Higher finance costs and forex losses forced the firm to increase its borrowing and weakening of the shilling saw ARM make a net loss of Sh469 million in the nine months ended September, reversing a net profit of Sh1.1 billion a year earlier