Oman’s Raysut Cement said on Tuesday it plans to acquire Kenya’s ARM Cement, which went into administration in August, as part of its expansion plans.
Raysut has expressed its interest to the administrators to acquire the company, it said in a statement.
“The acquisition will complement Raysut’s revised strategy to manufacture clinker in proximity to the markets it supplies to in East Africa,” Raysut said in a statement.
He added that the acquisition was estimated to be worth more than $100 million (Sh10.28 billion).
Raysut Cement is currently setting up a grinding unit in Somaliland and Mogadishu, Somalia with a Dubai-based partner.
The company is also in advanced discussions to acquire cement producers in Uganda and Djibouti.
ARM Cement, once Kenya’s second-largest cement maker, owes about $190 million to a range of creditors, including local commercial banks.
ARM’s creditors in October approved the sale of some assets to cut debt.
Last month, Dangote Cement was approached about a potential transaction by advisers of ARM Cement, a source with direct knowledge of the matter told Reuters.
ARM has not been trading at the Nairobi Securities Exchange since Capital Markets Authority suspended it on August 20.
The suspension came two days after the cement-maker was placed under administration.
Muniu Thoiti and George Weru from PricewaterhouseCoopers (PwC) took over management at the firm days after chief executive Pradeep Paunrana resigned.
UBA bank which had lent the cement maker a Sh500 million short-term loan instructed PwC to move in to help the firm recover by keeping away creditors from attaching its property.
The Insolvency Act of 2015 gives companies going through financial woes a chance to get their act together, including settlement of debts.
The company’s net loss for the half-year ending June widened by 64.6 per cent to Sh2.3 billion.
Last month, administrators wrote off Sh21.3 billion of the cement manufacturer’s bad debt reducing its asset base by 61 per cent with a negative equity position of Sh2.4 billion.