Cement maker ARM woes deepened on Monday after the Nairobi Securities Exchange (NSE) suspended trading of the company’s shares days after the company was put on administration.
In a statement, NSE said the suspension takes effect on August 20 and will last for a period of seven working days.
“This is to inform you of the suspension in trading of Athi River Mining Cement Plc shares, following the placement of the company under administration pursuant to Section 534(1) of the Insolvency Act, 2015,”
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“The suspension is issued with the approval of the Capital Markets Authority pursuant to Regulation 22(2) (b) of the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002,” read the statement.
On August 17, audit firm PricewaterhouseCoopers announced the appointment of Muniu Thoiti and George Weru as joint administrators.
“With their appointment, the administrators shall now take control of the business assets and the management of the affairs of the company without any personal liability,”
“By virtue of the administration, the powers of the directors of the company in terms of dealing and/or transacting with the company’s assets have ceased, unless with the express permission of the Administrators.” The audit firm said in a statement.
The decision to appoint the administrators was immediately supported by the board which said its only goal was to ensure the long term viability of the cash strapped company.
The suspension of the trading and placing of the company under administration come in quick succession of a shakeup in the company’s senior management over the past week.
The company recently tapped former Nation media Group CEO Linus Gitahi as chairperson and former French Minister of Cooperation Thierry Metro as a non executive, non independent member of its board.
Mr. Gitahi replaced the retiring Chair of the Board of Directors Eng. Wilfred Murungi while Mr. Metro took the place on the Board voided by Mr. Surendra Bhatia.
On August 16, outgoing chief executive Mr. Pradeep Paunrana stated he would be staying on as board member to assist the incoming CEO reverse the fortunes of the firm which was once Kenya’s second-largest cement maker behind LafargeHolcim’s Bamburi Cement.
The company is in the process of appointing a new CEO. Talks with Mr. Paunrana’s successor already at an advanced stage. The identity of the new CEO is yet to be made public by the cement manufacturer.
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An independent auditor told Reuters he doubted the survival of ARM Cement, which remains to be seen.
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