UK investment fund Commonwealth Development Corporation (CDC) has lost Ksh14 billion investment in ARM cement.
In this case, the CDC cedes its 42% ownership in the collapsed cement maker as receiver managers PwC sells ARM’s assets to recover debts.
CDC had invested Ksh14 billion in collapsed cement maker ARM in 2016, CDC’s first direct investment in the cement industry in Africa.
ARM statements show that the funds paid existing loans at the time as well as improved the firm’s financial position. Furthermore, the funds would help ARM develop to meet the growing demand for sustainably produced cement across sub-Saharan Africa.
CDC had in mid-November appointed Seema Dhanani as the new head for the Kenyan office. Dhanani will push CDC’s interests in Kenyan firms in sectors such as infrastructure, construction and real estate and financial institutions.
CDC, wholly-owned by the UK Government, has committed to invest $4.5 billion from 2018 to 2021 across Africa.
CDC’s other investments in Kenya include Malindi Solar Project at KSh5.2 billion, I & M Holdings (KSh5.1 billion), Africa Logistics Properties (KSh2.5 billion) and Garden City (KSh2.5 billion).
An earlier article said that CDC lost 97% of the stake leaving it with £2.8 million (KSh372 million) capital commitment in ARM which was incorrect. Rather than being the value of its capital commitment, this figure reflects the amount CDC injected into the business as a bridge loan in March 2018