October 23, 2018 / 11:00 AM / 8 months ago

UPDATE 2-Kenya's ARM Cement creditors approve sale of assets to cut debt

* Creditors agree to sell assets to cut debt

* Administrator says has 12 months to save company

* (Adds timeline, quote)

NAIROBI, Oct 23 (Reuters) - Creditors of Kenya’s ARM Cement , once the country’s second-largest cement maker but which has been in administration since August, approved on Tuesday the sale of a subsidiary or assets to reduce its debt of $190 million.

The creditors did not identify which subsidiary or assets would be sold, or the possible value of a sale, under Tuesday’s rescue plan, during which the company will remain operational.

George Weru, one of the co-administrators from PricewaterhouseCoopers (PwC), told Reuters they had 12 months to rescue the company.

“We are working hard with all the stakeholders and parties involved to ensure that we find a solution within the 12 months period,” he said.

Muniu Thoithi, the other co-administrator, said 102 creditors, collectively owed 9.6 billion shillings ($95 million), had backed the proposal.

Two creditors, together owed 87,000 shillings, rejected the plan, he added.

The company was put into administration in August by some of its creditors and its shares suspended from the Nairobi bourse. It has debts with a range of creditors including local commercial banks.

The company has seen its market share plunge to just 10 percent after the clinker plant it built in Tanzania in 2014 failed to generate income.

Weru has said the company’s production machinery was in need of urgent spare parts and its management needed to be rebuilt, after several key staff left due to its cash flow problems. ($1 = 101.0500 Kenyan shillings) (Reporting by Duncan Miriri; Editing by Alexandra Hudson)

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