On 2018-11-21, East African Portland Cement Company (EAPCC) said it needed at least Sh15 billion to avoid a complete shutdown, as the loss-making State-owned firm admitted its finances were in worse shape than first believed.
The company, which has already been denied a bailout by the State and has not secured a strategic investor since its troubles began eight years ago, said its debt had climbed to Sh10.8 billion. Kenya Commercial Bank (KCB) is its biggest creditor, with Sh4.5 billion owed.
New board chairman Edwin Kinyua told the Senate Committee on Trade and Industrialisation that Sh15 billion was the minimum required to stabilise the business. He said Sh10.8 billion would go to settling debt, while Sh2 billion would be needed to refurbish the ageing plant and another Sh1 billion would be required for working capital.
“You can see that our situation is grave. Even if we get the Sh15 billion, Sh10.8 billion will go to settling debt.
“Yet we need Sh2 billion to refurbish our ageing plant which right now is in a bad state and we need Sh1 billion for working capital financing,” said Mr Kinyua, who appeared before the committee alongside Managing Director Peter Ole Nkeri and other officials.
Mr Kinyua also disclosed that the company had failed to remit employees’ monthly deductions for bank loans and had not met its tax obligations to the Kenya Revenue Authority.
He said the company was now relying on a memorandum tabled to the Government by the Treasury and Trade Cabinet secretaries seeking approval to sell 900 acres of its prime land in Athi River to Kenya Railways (KR), another troubled State enterprise.
