ARM Cement defaults on June bond interest pay

Bavaria · 2018-07-10T07:52:41+00:00

ARM Cement defaults on June bond interest pay TUESDAY, JULY 10, 2018 8:47 A worker at an ARM Cement plant. file photo | nmg ARM Cement has defaulted on interest payment on a privately placed bond which it issued in 2015, underlining the extent of the firm’s cash flow crisis which CEO Pradeep Paunrana says management is in the process of fixing. The Nairobi Securities Exchange-listed firm missed its June 2018 interest payment worth tens of millions of shillings, spooking bondholders who were attracted to the security’s high fixed yield of 16 per cent per annum. The medium term notes (MTN) mature in November 2020 and were to pay interest each June and December, according to a pricing supplement seen by the Business Daily. “We’re asking our lenders to give us some time so that we can recapitalise the business, we’re in negotiation for injection of between $15 million and $20 million in the next couple of weeks,” said Mr Paunrana in a telephone interview. Affected bondholders said the cement manufacturer has not explained to them the interest payment default. “The company (ARM) did not pay interest that was due on June 6 and we are in the dark,” said one of the bondholders who did not wish to be named. The cement-maker issued bonds worth some Sh389 million in December 2015 as part of plans to raise a total of up to Sh10.5 billion. Its latest annual report puts the company’s outstanding bonds at Sh1 billion as of December 2017. The debt is unsecured, meaning that bondholders cannot be made whole by sale of ARM’s assets should the company’s default spread to the principal. ARM has also delayed salaries and employee pension contributions. READ: Auditors accuse ARM of Sh21bn debt cover-up ALSO READ: ARM Cement to give up Sh854m Tanzania assets Dar assets sale key to loss-making ARM turnaround plan ARM boss paid Sh114m in year of Sh6.5bn loss ARM Cement falls deeper in the red with Sh6.5bn net loss ARM Cement defaults on June bond interest pay

Thread starter Bavaria
Start date Jul 10, 2018

Bavaria

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ARM Cement defaults on June bond interest pay

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