This archive report was first published on 26 August 2019.
As the economy continues to struggle, several listed companies have reported declining earnings, leading to massive layoffs. This trend is evident in companies such as EABL, Stanbic Bank, EA Portland Cement, and KCB Group, which have recently terminated some of their workers' contracts.
ARM Cement, a company that has been in turmoil since 2018, faces a similar risk. The company was suspended from trading at the Nairobi Securities Exchange (NSE) in August 2018 due to financial burdens and was subsequently put under administration.
On 23rd October 2018, ARM's administrators, Muniu Thoithi and George Weru, proposed the sale of the debt-ridden company to a fitting buyer. The proposal was met with overwhelming agreement from the creditors during a meeting with the executives.
However, the sale was put on hold after ARM's CEO, Pradeep Paunrana, moved to court to stop the transaction. On 12th July 2019, High Court judge Justice M. Muigai granted Pradeep's request and issued an injunction against the sale.
As a result, over one thousand workers at the cement company are at risk of losing their jobs. Additionally, ARM's debts continue to mount, worsening the situation.
ARM has not released its financial results since its suspension from the NSE in August 2018. The future of the company is uncertain after the administrators' term came to an end on 16th August 2019.
Paul Ogunde, the lawyer representing ARM administrators, noted, “The Order made on 12th of July 2019 will, if not set aside urgently, occasion substantial and incurable damage to all stakeholders of the company except Mr. Paunrana.”
