CMA under pressure to delist ARM
The liquidator of ARM Cement, formerly Athi River Mining Ltd has instructed Capital Markets Authority (CMA) to delist the firm from the stock market, leaving shareholders with nothing to hold onto.
The move sharply reminds Nairobi Securities Exchange (NSE) investors where they belong in the sharing of spoils following corporate failures.
“Following a meeting of the shareholders of the company, CMA will now proceed to effect the delisting of the company’s shares,” the company’s administrator George Weru said.
The liquidator says they were able to get just over Sh6.2 billion worth of assets all of which will be used to compensate creditors.
“Creditors of ARM have consolidated a shortfall in excess of $100 million in recovery of their debts. Therefore, there are no funds available for distribution to shareholders,” the liquidator said in a statement.
“Some shareholders who are having a rough time are those of ARM Cement. The joint liquidators have decided that there will be nothing left for them after all the creditors have been paid,” said Mwango Capital, a financial research firm.
According to PwC data, lenders and unsecured creditors of the collapsed ARM Cement lost Sh11.5 billion during the distribution of proceeds after the liquidation of the listed firm.
The over Sh6billion ($50 million) was recovered from Kenya assets and KSh3.7bn from the sale of Tanzania Maweni mines that was bought by China’s Huaxin Cement.
Unsecured creditors, including Sayani Investments, received the worst hit after only recovering 6.2 per cent of their total claims against the company, which totaled Sh9 billion.
Out of their claims totaling Sh8.03 billion, secured lenders—mostly banks including Absa Bank Kenya and UBA Bank Kenya—were paid Sh4.98 billion.
Preferential creditors, which have priority in being paid in bankruptcies, were compensated in full at Sh326.6 million.
The largest unsecured lenders were Stanbic Bank ($920.1 million), Aerous ($1.55 billion), and investors of ARM’s commercial notes and bonds ($1.82 billion).