ARM Cement chief executive Pradeep Paunrana has stepped down but will remain on the Board according to a letter addressed to the staff, shareholders and business partners.
“As founder, shareholder and entrepreneur, I will be an active Board member and support the incoming
CEO and the management team in strengthening stakeholder relationships with suppliers, customers and
the Government in all the three East African countries where we operate,” he says.
ARM recently brought on board Linus Gitahi who will act as an independent chairman while Surendra Bhatia also resigned as the deputy managing director. These are some of the changes that the company has been making in a bid to return to profitability and deliver value to investors.
Tanzania Operations
According to the letter, Pradeep Paunrana said the company has overcome the challenges in its Tanzania business, Maweni Limestone, which has been struggling financially and operationally.
In June, Paunrana said: “We are reviving the business, strengthening management and getting to a position where whenever we bring equity, it is at most favourable terms to the lenders and shareholders.”
“As we now overcome the Tanzania specific challenges, I want to assure you all that I am as committed as
ever before, to ensuring that we restore the financial health of the company, the welfare of all employees,
our community support programs under the Rhino Cement Foundation, and of course, restore the market
valuation of our company,” the former CEO states in the letter.
Capital Injection
Paunrana has also said in the letter that British investment fund CDC Group provided the company with $4 million in the short-term working capital which will enable the company to recapitalise and restructure its remaining debt.
In 2016, CDC invested $140 million into ARM Cement based on an agreement that the duties of the management team and the Board of Directors would be separated. The implementation of this agreement seems to be already on track.
“As a Board, we will ensure that the equity injection will strengthen the balance sheet so that the company
can prosper by taking full advantage of growth in the cement consumption across East Africa over the
next decade,” Paunrana says.
