ARM Cement Tanzania unit sold for Sh12 billion

Companies

ARM Cement Tanzania unit sold for Sh12 billion

ARM Cement plant in Tanga, Tanzania. FILE PHOTO | NMG 

A leading Chinese company has bought Athi River Mining (ARM) Cement’s Tanzania subsidiary, Maweni Limestone Ltd, for $116 million (about Sh11.9 billion).

“This transaction will permit Huaxin immediate entry into one of the leading markets in East Africa and is integral to Huaxin’s broader strategy to expand its footprint across emerging markets,” joint ARM administrators George Weru and Muniu Thoithi of PricewaterhouseCoopers (PwC) Kenya said in a statement to the press issued Thursday.

The acquisition by Huaxin Cement is subject to certain conditions including receipt of regulatory approvals.

The sale of Maweni follows the sale of the assets of ARM Cement Kenya to Devki Group’s National Cement announced in May.

With PwC getting court clearance Thursday to sell the Kenya business for Sh5 billion, this brings the total sum gained from disposal of the troubled cement maker’s assets to Sh16.9 billion.

advertisement


The Chinese firm was among the initial four companies that had submitted binding offers by March 14, 2019 that included Dangote Cement, Mega Conglomerate and National Standard.

Huaxin initially placed Sh11.8 billion ($115 million) bid for the Tanzania business and enhanced its offer to Sh11.9 billion.

Late comer National Cement initially placed a bid of Sh4.6 billion before sweetening it to Sh5 billion four days later, making the Narendra Raval-owned firm the clear leader in the scramble for the Kenyan assets of the cement maker.

National Cement subsequently sealed the deal in May 20, 2019, only for Jaswant Rai to make a surprise Sh6.5 billion bid that forced the sale of ARM to go through the litigation that was concluded yesterday.

National Standard submitted its Sh25.2 billion ($252 million) bid as early as March for a 100 percent equity stake in ARM which was by far the highest bid.

Dangote put in a Sh4.5 billion ($45 million) offer for ARM Kenya operations, but was not contacted for the final binding offer over conditions in his bid to drill in Kitui.

“On grounds that Dangote had placed conditions on its binding offer in order to conduct drilling of the Kitui sites, it was not contacted to submit a full and binding offer,” Paul Muthaura said in a Capital Markets Authority review of the details of ARM transactions.

Mega put in Sh15 billion ($150 million) for Kenya and Tanzania’s Maweni, but did not try to enhance its offer.

Credit: Source link