Enterprise Television- ARM Cement Offer Sh854 Million Tanzania Assets
ARM Cement has a deal for buyers of its non-cement businesses, offering them additional assets in Tanzania worth Sh854.6 million for free.
The company earlier announced it had reached an agreement to sell its fertilizer and mineral production businesses in Kenya to Swiss firm Omya and Pinner Heights Limited (PHL), a company owned by its CEO Pradeed Paunrana, for Sh1.6 billion.
In its latest annual report that the buyers could also acquire its non-cement operations in Tanzania for free in what is seen as an effort to close the deal, which was still pending as of May.
Nairobi Securities Exchange listed firm said in the report “Further, the sale agreement grants the purchasers an option to acquire ARM’s non-cement business assets in Tanzania at no further financial consideration. The company estimates the loss arising from the sweetener at Sh854.6 million.
“The assets deemed as impaired were previously used exclusively in the production process for the non-cement products, but were not part of the assets to be acquired by the prospective buyer. The assets were therefore deemed as having scrap value and the resulting impairment loss booked.”
The Paunrana family is set to invest more than Sh650 million to buy stakes in the units that are being sold ARM Energy, Mavuno Fertilisers and its wholly-owned subsidiary ARM Minerals and Chemicals.
The family’s interest is in the divestitures signals, their confidence about the subsidiaries’ future potential as impartial businesses. Their participation may also have been necessary to give comfort to Omya.
Through a series of agreements between Omya, ARM and PHL, ARM Energy will end up fully owned by the family while Mavuno Fertilisers will be owned jointly by the two buyers.
Omya will have a controlling 51 per cent stake in Mavuno Fertilisers while the Paunranas get the remaining 49 per cent equity. The two purchasers will have a similar interest in Mavuno’s 100 per cent owned subsidiary ARM Minerals and Chemicals.
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