The International Finance Corporation (IFC) and KCB Group will jointly provide Ksh. 2.5 billion to partly finance the Ksh. 5 billion acquisition of ARM Cement’s Kenyan operations by National Cement Company.
According to a news report by Business Daily, the two financiers have been funding Narenda Raval’s National Cement Company for years now with their cash injection vital in ensuring the company secured the ARM sale.
“We can fund half the deal (Ksh2.5 billion) from our own cash flows. The balance we will get from IFC and KCB,” Narendra Raval, the Chairman and major shareholder of National Cement, is quoted as saying by the Business Daily.
Mr. Raval however failed to reveal the specific amounts that the lenders are to individually fund into the acquisition of ARM.
Prior to its acquisition by National Cement Company, firms such as Oman’s Raysut Cement and Nigeria’s Dangote Cement had been mentioned as companies interested in acquiring assets of the debt-ridden cement maker.
According to Business Daily, the aforementioned companies and other interested parties also bid for ARM cement but their bids were unsuccessful since the firms only tabled bids ranging between Ksh. 3 billion and Ksh. 4 billion which were deemed as insufficient by ARM’s administration.
The Business Daily similarly reports that part of the cash injection will go into revamping ARM’s plant and equipment which will better the company’s productivity and local operations. The primary activities of ARM and its Tanzania and Rwanda subsidiaries are the manufacture and distribution of cement, mining, and processing of industrial minerals and chemicals, trading in other building products and the sale of fertilizers.