ARM of Kenya Expects Accord on $140 Million Investment in Aprilby
ARM Cement Ltd., a Kenyan producer of the building material, expects to conclude talks on a foreign investor taking a $140 million stake in the company by April 15.
The investment is expected to be concluded by June, the Nairobi-based company said in a statement e-mailed by the city’s stock exchange on Tuesday. ARM first announced talks about the potential investor in December, when it said it was seeking a $125 million cash injection.
“The board and management of the company believe that the investment would, if made, strengthen the financial position of the company as it executes its regional growth plans,” according to the statement. ARM didn’t give an explanation for the increased investment.
ARM, Kenya’s second-biggest cement producer by market value, faced “liquidity challenges” that cast doubt on whether it’s able to meet obligations on its commercial-paper programs, the Capital Markets Authority said March 7. In January, the company said the foreign investment would be by way of seven-year convertible preference shares which, on conversion to equity in the company, wouldn’t be expected to reach the threshold requiring a mandatory takeover bid.
The company will use at least $110 million of the funds to repay debt and the balance to fund “existing and new cement businesses,” according to the statement.