Athi River Mining Company is to wind up its operations on 30th September 2021, bring an end to more than two years when the cement maker has been under administration.
The United Bank of Africa(UBA) placed ARM under administration on August 17, 2018, over a loan default and has remained on the death bed ever since.
ARM has total claims amounting to $ 154.14 Million
Available figures indicate that ARM went under with total claims of $ 154.14 Million made up of $ 2.88 Million belonging to preferential creditors, KSh 17.06 Million(secured creditors) and $ 80.2 Million( unsecured creditors).
The Cement maker was placed under administration in August 2018 after it failed to meet its financial obligations. In August 2018, ARM shares were also suspended from trading on the Nairobi Securities Exchange.
The Capital Markets Authority indefinitely extended the suspension with effect from 8th May 2020.
The Cement maker has subsidiaries in Kenya, Tanzania, South Africa, and Rwanda with a unit that produces fertilizers under the brand name Mavuno.
ARM’s Kenyan assets were acquired by its main rival National Cement in 2019 at a cost of KSh5 billion.
The firm has been disposing off subsidiaries including the sale of Maweni Limestone Limited in Tanzania.
Liquidators will wind up ARM to settle claims estimated at $ 103.82 Million. George Weru and Muniu Thoithi of Price Waterhouse Cooper made ends on September 30th, 2021
The joint administrators — George Weru and Muniu Thoithi of PricewaterhouseCoopers (PWC) — said in a circular to the creditors dated September 21 that their mandate of the administration of the company is set to end on September 30 in line with a court order dated September 9.
“We expect funds will be received by ARM in the month of October 2021 for distribution to the creditors of the Company,” according to the Joint Administrators.
The proceeds from the Maweni transaction is expected to push recovery to ARM’s secured creditors to 60 per cent of their total admitted claims, from the current 35 per cent while that of unsecured creditors will rise to six per cent of their total admitted claims from 1.8 per cent.
According to the administrators, further recoveries from Maweni transaction, if any, are unlikely to exceed $5 million, while in Kenya a dispute over capital gains tax (CGT) with the Kenya Revenue Authority (KRA) amounting to $4.73 million, relating to the sale of ARM assets and business to National Cement Company Ltd for a total consideration of $50 million is yet to be resolved.
“Recovery to the respective categories of creditors may improve further should the Administrators succeed in unlocking further amounts from residual retentions relating to the Kenya and Maweni transactions,” they said.
The Rwandese business while has been shut down successfully is yet to get any bidders for its assets.
In South Africa, a court is yet to make a ruling in a case in which minority shares are seeking to cancel the shareholders’ agreement and ceding of ARM’s shares in Mafeking Cement to themselves, citing non-performance by ARM.